Asos share price: Retailer shrugs off warehouse fire as website reopens
Asos shares rose two per cent yesterday as the online fashion retailer reassured investors and said it had resumed taking orders following a fire at its main warehouse this weekend.
The fire at its Barnsley warehouse in South Yorkshire on Friday night forced the company to suspend its website over the weekend and sparked fears of a lengthy time out of action.
However, Asos said that it had resumed trading in the early hours yesterday and that it was fully insured for the loss of stock and business interruption.
Asos’s big summer sale, which was meant to start yesterday, will kick off today.
“None of the technology, automation or structure of the building has been affected by the fire,” the group said in a statement.
Around 70 per cent of Asos’s £159m stock is held in Barnsley and the company estimated around 20 per cent had been damaged by the fire and the sprinkler systems.
More than 50 firefighters and 10 fire engines were called on Friday night to put out the blaze, which spread through four floors of the 530,000 square feet distribution centre.
South Yorkshire Police said the incident was being treated as deliberate and that a criminal investigation had been launched to establish the cause of the fire.
Asos said it was cooperating fully with the investigation.
The fire comes just weeks after the online giant said it would miss full-year profit forecasts by around 30 per cent because of the strengthening pound and heavy promotional activity.
The warning, which wiped £1.2bn off its market value, came just months after Asos warned that plans to accelerate spending on new warehouse space in the UK and Germany would also take its toll on short term profits.
It is also not the first warehouse tragedy for the distressed retailer; in 2005 the company’s former warehouse in Hemel Hempstead was damaged by explosions at the Buncefield fuel depot.
Analysts at Barclays said they believe disruption to sales and profits will be “limited” but warned that its £1bn full-year sales target could be at risk, given the website was not operational for two days.
The timing of the insurance payout could also pose a risk to profits, Barclays said.