Asos is shutting down a huge warehouse that opened just two years ago as sales collapse and losses reach £300m.
In another grim set of results, the online fashion group said it would save £20 million a year by closing its center in Lichfield, Staffordshire, which could cost hundreds of jobs.
The decision to close the £90m site, which opened in 2021, came as annual losses widened to £297m in the 12 months to September 3, from £32m a year earlier.
Sales fell 10 percent to £3.5 billion and Asos warned that sales could fall by up to 15 percent in the current financial year.
Shares in Asos fell 7.7 percent, or 30.4 pence, to 365 pence and are down 27 percent this year and more than 95 percent since their peak in 2018.
Decline in sales: Asos said it would save £20m a year if it closed its hub in Lichfield, Staffordshire, which could cost hundreds of jobs
“Another day, another profit warning from Asos,” said Russ Mould, investment director at AJ Bell.
Like rivals such as Boohoo, Asos has seen its online shopping boom wane during the pandemic, leaving it struggling to retain its young customer base as shoppers return to the high street.
The number of active customers fell by 9 percent to 23.3 million over the course of the year.
Chief Executive Officer Jose Antonio Ramos Calamonte has struggled to overcome challenges including the large number of shoppers returning online orders and rising costs.
In contrast, well-known brands such as Next, Marks & Spencer and JD Sports experienced a boom.
There has been speculation that Topshop could be sold, less than three years after Asos bought it from Sir Philip Green’s beleaguered empire.
Julie Palmer, partner at Begbies Traynor, said: “It could be that this trading environment is pushing the retailer to strengthen its balance sheet by shedding assets as quickly as it does its unwanted clothing.”
Removing dead wood may not be enough to get this business back on track.”
Asos is reducing its offering, Calamonte said. It has already reduced inventories by around 30 percent last year and is aiming for a further reduction of 16 percent over the next 12 months.
Garments introduced in the summer under the new approach sold well, Calamonte said, claiming it had found a “successful formula” for growth.
Mike Ashley’s Frasers Group has built a stake in Asos and Boohoo, fueling speculation about the future of both companies.