Yahoo Finance Asos Warehouse Fire Cost Up To £30m
Online fashion retailer Asos (Other OTC: ASOMY - news) says a fire at its Barnsley warehouse this summer cost it up to £30m in lost sales.
The company made the announcement in its trading update for the three months ending August 31 - its final quarter - in which it also warned that significant investment would dent profits in its current financial year.
The blaze, in June , damaged 20% of stock inside the premises and a criminal inquiry is continuing into how it started, with arson suspected.
Asos managed to restart orders within 48 hours of the fire and then launched a sale, with discounts of up to 50%, a day later.
Chief executive Nick Robertson said: "Our UK performance remained strong over the final quarter, with sales increasing 33%.
"Our international business grew 6% or 14% in constant currency.
"However, due to the fire at our Barnsley distribution centre, we lost sales during the quarter of between £25m and £30m with a retail gross margin impact of circa 200 basis points.
"After adjusting for insurance proceeds, we expect profit before tax for the year to be in line with market expectations.
"Engagement with our customers remains positive with a 25% growth in active customers and increases in order frequency, conversion rate and average basket value.
"Sales for the year as a whole increased by 27%."
He also announced a new drive to boost its international expansion.
Mr Robertson added: "In the new financial year we'll make significant investments in our international pricing and proposition, as well as in our logistical infrastructure and technology platform.
"As a result, we expect profit before tax for the year to 31 August 2015 to be at a similar level to 2013/14.
"We remain focused on the long-term opportunity for Asos, with £2.5bn of sales as our next staging post."
Asos, once a darling of the stock market, has seen its value under pressure following a series of profit alerts - partly a result of heavy discounting.
Its share price fell 14% in early trading on Tuesday.
