Boohoo is “realigning” its operations in the US as part of its strategy to “reposition the group for sustainable, profitable growth”.
The online fashion giant will stop using its US distribution centre in Pennsylvania, which opened just a year ago, and fulfil all US orders from its automated distribution centre in Sheffield, in a move which it says will broaden its product offering for shoppers across the pond and expand its routes to market.
The decision follows a recent trial that expanded the range of products available to US customers by fulfilling orders from the UK. Boohoo says the trial showed US consumers valued an increase in the product range available over speed of delivery – previously, US customers had access to only about 60% of the styles available in the UK.
Boohoo said it “remains excited about the opportunity in the US” and has been developing broader routes to market strategies. This includes the recent launch of Nasty Gal in Nordstrom stores, ongoing discussions with major US brands for potential new market opportunities for other group brands, and a high-profile celeb-strewn LA party to launch boohoo Collective last month.
The company’s statement added: “The Group remains excited about the opportunity in the US and has been developing wider routes-to-market strategies, the first of which is the recent launch of Nasty Gal in Nordstrom stores. The Group is also in advanced talks with major US brands with regard to new routes to market for other brands within the Group.”
It added that the move will also result in a significant reduction in ongoing costs over the medium term. The huge distribution centre is operated by a third party and is a property lease that boohoo will now sublet. It is anticipated that boohoo operations at the site will end as soon as November 11, 2024.
Last month, reports emerged that the business is considering a sale of its London Soho office building that it acquired in 2021 for £72m. The fashion group is said to be in discussions with prospective buyers for the 43,963 sq ft office block at 10 Great Pulteney Street.
It comes as the group’s lenders are understood to have drafted in advisers at FTI Consulting to discuss refinancing options for part of Boohoo’s £325m debt.
