ASOS shares soared on Monday after the online fashion retailer agreed to sell its Lichfield fulfilment centre to Marks and Spencer for £66 million, marking a significant step in its cost-cutting strategy.
Details of the Deal
The sale, expected to close in the second half of 2026, will generate at least £6 million in annual savings on rent and occupancy costs and result in a one-off pre-tax profit of approximately £85 million. ASOS said the net proceeds will be used to maintain financial flexibility and reduce debt.
The transaction is part of ASOS's 'Efficient Operating Model', which aims to streamline operations and improve stock turn after the company decided to mothball the Lichfield site. ASOS confirmed that its Barnsley and Berlin warehouses provide sufficient capacity for future growth.
CEO Statement
Jose Ramos, ASOS chief executive, said: “This transaction enables us to unlock value from one of our non-core assets while reducing our ongoing cost base, consistent with the actions we have taken over the past three years to simplify the business and enhance financial resilience.”
Market Reaction
ASOS shares jumped as much as 12.5 per cent to 245p on Monday morning, while M&S shares fell 9.8 per cent to 329p.
Background
In 2023, ASOS closed the Lichfield warehouse, which had opened only two years earlier, as it expected sales to fall by at least 15 per cent. The closure cost approximately 700 jobs.
M&S Plans for the Site
Marks and Spencer said the 437,000 square foot warehouse will become an operational logistics hub in 2027, employing 600 people as it accelerates the transformation of its Fashion, Home, and Beauty division. John Lyttle, managing director for Fashion, Home and Beauty, said the company plans to use the site to double online sales. “To achieve this and serve our customers faster, more efficiently, and with better availability, our distribution network needs more capacity,” Lyttle said.
