UK fashion retailer ASOS is making efforts to reduce costs and turn the business around. One of the major cost-cutting measures includes closing a warehouse in the Midlands, which is expected to save the company around £20 million annually. The facility, located in Lichfield, Staffordshire, was opened just two years ago and cost £90 million to automate. While the closure will result in job losses for over 700 employees, ASOS has chosen to mothball the warehouse, keeping the option of selling or reopening it in the future.

ASOS had previously announced plans to shut down three other warehouses, including one in the US and one in mainland Europe, as part of its cost-cutting strategy known as Driving Change. The closure of the Lichfield warehouse is a clear sign of the company’s commitment to making necessary changes throughout all aspects of the business.

In addition to the warehouse closure, ASOS is reportedly in talks with Authentic Brands Group about the potential sale of the Topshop brand. While the CEO, José Antonio Ramos Calamonte, did not confirm or deny the discussions, it is speculated that ASOS is aiming to secure a premium price for Topshop, which it acquired for over £265 million.

The potential sale of Topshop to Authentic Brands Group aligns with the company’s recent acquisitions of other UK assets, such as Ted Baker and Hunter. Although there is no official confirmation, industry experts believe that Authentic Brands Group is one of the likely buyers for the brand.

Despite the talks of selling Topshop, Calamonte expressed satisfaction with the brand’s performance in the past year, indicating that ASOS is pleased with its investment. This suggests that the company may be looking for a substantial return on its initial purchase.

With its cost-cutting measures, ASOS aims to reduce company costs by £300 million through its Driving Change strategy. The closure of the Lichfield warehouse is a significant step towards achieving this target. As ASOS continues to streamline operations and search for ways to save costs, it remains to be seen what other changes lie ahead for the company.

Useful links:
1. BBC – ASOS mothballs warehouse as part of cost-cutting drive
2. Reuters – ASOS mothballs warehouse as part of cost-cutting drive