Yahoo Finance Asos plans fifth warehouse to slash delivery times
Asos is hunting for a new warehouse in continental Europe as it seeks to improve its home delivery in key markets after a boom in internet orders during the pandemic.
The online fast-fashion player told investors this month that it was in the “early planning stages” of its fifth fulfilment centre, which will most likely be located on the Continent.
Mathew Dunn, finance chief, said the move would allow Asos to reach over £6bn in capacity by the end of 2023. It already has depots in the UK, Germany and the US, with its warehouse in Lichfield expected to open next year.
It is working on balancing its sea, air and road freight due to increased costs caused by disruption from the pandemic on global supply chains. It introduced more routes by sea to reduce its reliance on premium air freight, it said.
To manage the increased lead time from the UK to Europe due to Brexit, the company is also using additional ports for entry into the EU to reduce custom waiting times. The aim is to return lead times to four days from eight currently.
It added that the HGV driver shortage in the UK is not impacting day-to-day business.
A raft of businesses have been affected by the chronic shortage of lorry drivers, especially in the food supply chain. The Road Haulage Association has estimated there is a shortfall of 100,000 HGV drivers mainly because EU workers have left the UK and due to the suspension of driver training and testing during the pandemic. Fewer people are taking it up as a profession, exacerbating the issue.
In April, Asos posted pre-tax profits of £106m for the six months to Feb 28, compared with £30m for the same period last year thanks to strong demand for “lockdown outfits” from younger shoppers. Group sales rose by 24pc to nearly £2bn.
Asos, which started in 2000 as As Seen On Screen, has benefited from shoppers switching online while shops were closed and people were told to stay at home. It has a market capitalisation of £4bn.
More than two thirds of customers can get their orders the next day. Asos also offers same-day delivery in London as well as click-and-collect services across the globe.
In February, it bought the Topshop, Topman, Miss Selfridge and HIIT brands, but not the stores, from the collapsed Arcadia Group for £330m.
The online retailer launched the full ranges of the brands on its websites within three weeks of the deal and promoted it heavily on social media.
