Marks & Spencer (M&S) has agreed to purchase a warehouse from Asos in Staffordshire, a strategic move that will create an additional 600 jobs and support the retailer’s ambition to double its online sales. The 437,000 square foot site in Lichfield is set to become one of M&S’s largest distribution centres when it opens in 2027.
Background of the warehouse
The warehouse was previously mothballed by Asos in 2023 as part of a broader overhaul aimed at reducing stock levels, cutting costs, and improving profitability. At the time of closure, it employed a few hundred workers, though Asos noted these individuals were not directly employed by the group. The site has remained dormant since then.
M&S’s strategic vision
M&S stated that the new facility will add critical capacity and enable faster order processing, helping the company achieve its long-term target of doubling the size of its online fashion, home, and beauty business. A spokesperson for the chain explained: “The new site will support the strategy to deliver more of M&S fashion faster than ever before, enabling customers to order later in the day and with more sizes and styles available.”
John Lyttle, managing director for fashion, home and beauty, elaborated: “As we transform M&S fashion, home and beauty, our ambition is to double online sales. To achieve this and serve our customers faster, more efficiently and with better availability, our 24/7 distribution network needs more capacity.” He noted that acquiring the existing warehouse allows M&S to progress its transformation plans at a lower cost than building a new facility from scratch.
Financial implications for Asos
Asos will receive at least £66 million in proceeds from the sale and save approximately £6 million annually in costs such as rent. The transaction is expected to deliver a one-off profit boost of around £85 million upon completion, anticipated by the end of August. The company confirmed that its remaining warehouses in Barnsley, South Yorkshire, and Berlin will provide sufficient capacity to support future growth.
Asos chief executive Jose Antonio Ramos commented: “The disposal of our Lichfield fulfilment centre represents a further step in strengthening Asos’s balance sheet and improving our capital efficiency. This transaction enables us to unlock value from one of our non-core assets while reducing our ongoing cost base, consistent with the actions we have taken over the past three years to simplify the business and enhance financial resilience.”
Conclusion
The deal marks a significant development for both retailers, with M&S gaining a key asset to accelerate its online growth and Asos streamlining its operations and finances. The Lichfield site is poised to become a cornerstone of M&S’s distribution network, supporting faster delivery and expanded product availability for customers across the UK.
