Britain's ASOS Plc flagged a one-time impairment charge exceeding $200 million in fiscal 2025 due to the "mothballing" of its Atlanta distribution center on Wednesday, as the online fashion retailer navigates a tough business environment.
Over the last couple of years, ASOS has been working to transform its business after losing popularity among its target audience of young customers and dealing with an inventory surplus.
This effort by the retailer, however, has coincided with the growing prominence of budget-friendly fast-fashion brands such as Shein and the Chinese online retailer Temu.
The decision to phase out the Atlanta facility comes after ASOS completes a multi-year warehouse automation project.
US customers will be served from the retailer's automated UK fulfillment center from the second half of 2025 and through a smaller local site, ASOS said.
Due to the shift, the retailer expects to take a one-time hit of about 190 million pounds ($231.91 million) on its reported profit in fiscal 2025, and then save between 10 million pounds and 20 million pounds annually in core earnings from financial year 2026.
ASOS intends to market the Atlanta site - seven employees will be offered new roles if possible, and many third-party logistics workers will be given opportunities at nearby locations, the company said.
The firm, which opened a local US office in 2024, said it will continue to grow and build its local presence.
