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Asos rallies after warehouse fire halts trading

Asos could face a sales hit of between £6.8m and £8m following the suspected arson attack on its warehouse on June 20, but its quick response means it is unlikely to suffer in the longer term.

The fire, which forced the etailer to halt trading last weekend, took hold on Friday night (June 20) at 9.50pm at the distribution hub on Park Spring Road in Grimethorpe, Barnsley. Asos resumed trading at 2am on June 23 before the launch of a summer Sale the following day.

Police believe the fire was started deliberately. Asos keeps about 70% of its stock at the depot; in total, the business held £159m of stock at cost as of May 31.

Independent analyst Nick Bubb estimated Asos could have missed out on about £8m of sales over the weekend. Other sources indicated it would be closer to £6.8m. However Asos said it had not yet calculated the level of sales lost. 

Bubb told Drapers he did not believe the fire would have a long-lasting impact: “It was only two days, not that much stock was damaged and customer confidence probably won’t be affected long term.”

Honor Westnedge, lead retail analyst for Verdict, agreed. “It was just two days. They handled it quickly and efficiently, getting it sorted over the weekend.”

Asos estimated around 20% of stock held at the site was damaged by fire or the sprinkler systems, although it is not yet known whether this included new season collections.

This is not the first time Asos has had to deal with a fire at a distribution centre. Its Hemel Hempstead warehouse was damaged by explosions at the Buncefield fuel depot in 2005.

Stewart Dymant, partner at Harris Balcombe, the loss assessor Asos used in 2005 and again last week, said the full extent of the more recent damage was yet to be assessed.

He said the company was fully insured for damage to stock, business interruption – including loss of sales due to the fire – and damage to other items in the building. A full evacuation was conducted and there were no injuries. The structure of the building was unaffected.

“We’re very confident all the losses will be made good by the insurer,” said Dymant. Some brands were still offline, he said, but most would be back by the end of the week. Asos would not say which brands.

A spokeswoman for Asos said police were still investigating the fire as Drapers went to press. She could not say when this was likely to conclude.

Readers' comments (2)

  • Do the insurers still payout if it is proved to be arson?

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  • I think the above depends on whether it was an inside job or not. If someone started the fire who wasn't connected with ASOS, then they should get paid out, but it is rather convenient losing 20% of stock at sale time which makes this fire very, very suspicious.

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