Asos has agreed terms with Marks & Spencer (M&S) to sell its Lichfield fulfilment centre for £67.5m.

The online fashion retailer said the disposal comes after it recorded lower capacity requirements over the past three years, as a result of improvements in stock turn and the scaling of flexible fulfilment.

Asos is expecting net sale proceeds to be at least £66m, with annual cash savings of £6m relating to rent and other occupancy costs.

The transaction is also set to result in a one-off profit before tax of around £85m after adjustments. This will be reflected in its financial results for the period during which the transaction is completed.

Following the announcement, shares in Asos jumped by over 10%.

Chief executive officer at Asos, Jose Antonio Ramos, said: "The disposal of our Lichfield fulfilment centre represents a further step in strengthening Asos' balance sheet and improving our capital efficiency. This transaction enables us to unlock value from one of our non-core assets while reducing our ongoing cost base, consistent with the actions we have taken over the past three years to simplify the business and enhance financial resilience."

The site is set to become operational as part of the M&S network in 2027, employing 600 people.

M&S stated that the new logistics hub will add capacity and process orders quickly, as it looks to double the size of its online fashion business.

The site will also support its strategy to deliver more of its fashion “faster than ever before”, enabling customers to order later in the day.

The retailer said that supply chain transformation is a “strategic priority” as it looks to reshape for growth, shortening the time it takes for product to move form supplier to distribution, then into store or to customers.

It added that there is “much opportunity to create a proposition” for customers, drive online growth and make efficiencies to improve profit margin in the long term.

Managing director for fashion, home and beauty at M&S, John Lyttle, concluded: “As we transform M&S fashion, home and beauty, our ambition is to double online sales. To achieve this and serve our customers faster, more efficiently and with better availability, our 24/7 distribution network needs more capacity.

“We’ve always said that we’ll deliver our transformation with highly disciplined capital investment, always mindful of spending shareholder money wisely. This acquisition does just that, delivering tangible business benefits that move our transformation forward, at a much lower cost compared to a new build option.”

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