British online fashion giant doubling down on the U.S.

BY Marianne Wilson

As if American apparel retailers didn't have enough homegrown competition, ASOS, the largest online fashion retailer in the U.K., is making a major push into the American market.

The company has signed an agreement to establish its second North American fulfilment center, in Union City, Georgia, outside of Atlanta. The center, which has an initial investment of $40 million, will be able to handle 10 million items, with the opportunity to expand further. Construction is expected to begin shortly, with operations starting in fall 2018.

"This agreement is a major step forward for ASOS in the US and demonstrates the opportunity we believe lies ahead in this key market," said Nick Beighton, CEO, ASOS. "Our US business delivered 39% constant currency growth in the first six months of the current financial year. Our U.S. fulfilment centre will enable us to significantly develop our proposition for our 20-something US customers supporting our continued growth and future ambitions."

Founded in 2000, ASOS (which stands for "As Seen on Screen") targets young millennial men and women with affordable fast-fashion items and accessories. It features 85,000 different products (including 4,000 new styles every week) to 12.4 million active customers. About 40% of the mix comes from its own brand, and another 20% from exclusive items created for it by other brands. The rest is made up of items from both well-known labels and smaller ones.

According to Business Insider, U.S. sales make up 12% of ASOS's total sales globally, and are growing twice as fast as U.K. sales. The retailer is looking to capitalize on that growth with its new distribution center.

"This fulfilment centre will significantly enhance ASOS' US customer proposition providing more cost effective, faster and more flexible delivery options," the company stated.

The company currently has a market cap of about five billion British pounds, or around $6.5 billion. Sales totaled about $1.8 billion in 2016. With eight local language websites, ASOS sells to customers in the U.S., U.K., Australia, France, Germany, Spain, Italy and Russia.


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