Asos is on a roll with its global expansion efforts and its latest move could bring it closer to U.S. consumers.
On Tuesday, the company announced that it will open a new e-commerce fulfillment center in Union City, Georgia. The center, which is slated start operations in Fall 2018, will heighten Asos’ U.S. market presence and allow it to deliver more affordable and faster delivery options nationwide. As part of its phased development program, Asos will invest $40 million to build the 10 million unit capacity facility, which is projected to grow in the future.
“This agreement is a major step forward for Asos in the U.S. and demonstrates the opportunity we believe lies ahead in this key market. Our U.S. business delivered 39 percent constant currency growth in the first six months of the current financial year following sales of $232M in the year ended August 2016,” Asos CEO Nick Beighton said. “Our U.S. fulfillment center will enable us to significantly develop our proposition for our 20-something U.S. customers supporting our continued growth and future ambitions.”
Asos’ warehouse announcement follows its recent financial results. In July, Asos disclosed that its total retail sales increased 32 percent for the four months ended June 30. During this period, Asos’ U.S. sales increased 38 percent to $122 million, due to the e-tailer’s strong investments in price and customer proposition. The company also anticipated that its full year profit before tax (PBT) will be in line with market consensus, which it said was $105 million. In addition to the company’s financials, Beighton confirmed that the e-tailer’s Eurohub 2 fulfillment facility in Germany began operations and that it would announce a new U.S. logistics center shortly.
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While other retailers continue to struggle, Asos keeps climbing to the top with its trend-heavy business strategy. Unlike other retailers’ price structures, Asos pays more to deliver unique and popular apparel items to consumers worldwide. Although core apparel items are important to the e-tailer’s lineup, Asos’ trend-focused approach could be the reason why consumers find it an appealing wardrobe resource. With the ability to cater to consumers’ style needs in a digital landscape, Asos could remain a major player in the U.S. retail scene over the next few years.