Investing.com — ASOS ( LON: ) on Wednesday announced plans to put its Atlanta distribution center in operation in the second half of 2025, marking a shift in the company’s logistics strategy in the U.S. market.
The Atlanta location, which opened in 2018, has been a key hub for the retailer’s operations and has seen significant investment over the years, including a major warehouse automation project that is still ongoing.
In a statement, ASOS said the closure would result in approximately £200m of profit and loss adjustment items during FY25, primarily related to fixed asset impairments.
Despite the headline figure, financial performance is expected to be largely neutral for the fiscal year.
Analysts at Jefferies highlighted the expected long-term benefits from the move, with ASOS predicting annual improvements in P&L and cash flow of £10-20m starting in FY26.
This follows the closure of its Lichfield distribution center in the UK in 2023, as well as the expansion of its “Partner Fulfills” program—a fulfillment model that leverages third-party sellers to deliver directly to customers.
“From the second half of FY2025, US customers will be served from ASOS’ automated UK fulfillment center in Barnsley and through a smaller, more flexible local US site,” the company said.
These changes are expected to improve operational efficiency while reducing overhead costs.
While ASOS remains optimistic about the US market, calling it an “opportunity”, the decision to close Atlanta DC highlights the challenges the company faces in the region.
Analysts at Jefferies see this as a pullback, with ASOS writing off some of its invested capital in the process.
The decision is in line with the company’s continued focus on optimizing its cost base and improving profitability, but also raises questions about the near-term scalability of its US operations.
ASOS says its commitment to the US remains strong, citing the introduction of Partner Fulfills and the establishment of a smaller local site as key factors in its growth ambitions in the region.
However, the closure of such a high-profile facility reflects a significant recalibration in the retailer’s approach to dealing with the complexities of international expansion.
For stakeholders, this development signals both caution and opportunity. While the immediate impact may be neutral, long-term financial gains and operational efficiencies are expected to strengthen ASOS’ overall position.
Yet the closure also highlights the inherent challenges of maintaining expensive infrastructure in a competitive and unpredictable retail environment.
“We believe this reflects a focus on protecting unit economics, which we expect to continue, in light of a highly competitive environment,” analysts at RBC Capital Markets said in a note.
“As profitability remains a priority, investment in growth may be somewhat limited, to the potential detriment of growth beyond FY25,” RBC added.
