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Asos takes orders again after warehouse fire Asos to mark return to selling after warehouse fire with huge summer sale
(about 4 hours later)
Asos has started taking orders again after a fire at its main warehouse forced the online fashion retailer to suspend its website over the weekend. Asos is launching a massive summer sale on Tuesday as it seeks to woo back customers affected by the fire in its main warehouse at the weekend.
The company estimated that the fire and the sprinkler system at the site in Barnsley damaged about 20% of the stock held there. The online fashion retailer is offering discounts of up to 50% as it resumes taking orders after the blaze forced the closure of its website for two days.
Friday night's blaze tore through several floors of the giant distribution centre, which holds 70% of Asos's £159m of stock valued at cost price. The company estimated the effects of the fire and the sprinkler system at the site in Barnsley had damaged about 20% of the stock held there. Friday night's fire tore through several floors of the giant distribution centre, which holds 70% of Asos's £159m of stock, valued at cost price.
The fire raised fears that the company could be out of operation for a long time. Every product Asos sells is checked at the warehouse before it is shipped for delivery. Last year the group had sales of £770m. The fire raised fears that the company could be out of operation for a long time. Every product Asos sells is checked at the warehouse before it is shipped. Last year the group had sales of £770m.
In a statement to the stock exchange on Monday, Asos said: "None of the technology, automation or structure of the building has been affected by the fire.In a statement to the stock exchange on Monday, Asos said: "None of the technology, automation or structure of the building has been affected by the fire.
"The clean-up process commenced on Saturday morning and progressed quickly. Consequently at 2am this morning we recommenced taking orders. We are fully insured for loss of stock and business interruption." The company's shares were down around 2% at £26.95. "The clean-up process commenced on Saturday morning and progressed quickly. Consequently at 2am this morning we recommenced taking orders. We are fully insured for loss of stock and business interruption."
The better-than-expected news saw the shares close up more than 2% at £28.15.
Detectives from South Yorkshire police believe the fire was started deliberately and have launched a criminal inquiry.Detectives from South Yorkshire police believe the fire was started deliberately and have launched a criminal inquiry.
The fire hit Asos during a rocky period for the one-time stock market sensation. Less than three weeks ago, the company warned that annual profits would be less than expected. The statement wiped almost a third off the company's stock market value, which had rocketed as investors bought into internet shares. The fire comes at a difficult time for Asos which has fallen from stock market grace after issuing two profit alerts in the past six months. The second, less than three weeks ago, warned annual profits would be less than expected due to a perfect storm caused by the strengthening pound and heavy discounting.
Asos blamed a slowdown in sales growth and a squeeze on profit margins from increased competition. Some analysts said Asos had expanded too fast and had underestimated competition from traditional retailers as they improved their online operations. That statement wiped almost a third off the company's stock market value and short sellers, who try to cash in on a fall in a company's share price, are now thought to be targeting Asos. Around 5% of the retailer's shares are now out on loan compared with 1.4% – the usual level for a listed company – at the start of this month.