Asos will make around 60 people redundant as a result of the closure of its Chinese business, Drapers can reveal.
Asos announced earlier today (April 7) that it is shutting down its operations in China three years after launching, at a cost of £10m. The etailer will service its Chinese customers via the main Asos.com website, which allows shoppers to access 80,000 products rather than the 6,000 available on the Chinese website.
As a result of the decision, 60 people based at its Shanghai office and fulfilment centre will lose their jobs, while the remaining 20 members of staff will be redeployed within the business.
Chief executive Nick Beighton said the closure of the business in China will serve shoppers in a “more efficient, less costly manner”.
City analysts welcomed the move. UBS said: “The decision reflects good capital discipline by management and an increased focus on the areas where they have more competitive advantage.”
Barclays agreed: “We view today’s announcement as a strictly positive outcome given any long term profitability in the region was dubious. We believe today’s news will come as a relief to long term shareholders as now focus and time can be allocated to more productive regions like the US, where the return on investment can be materially higher and value additive.”
For the year to August 31, Asos’s Chinese business made a loss of £5.2m, compared to a loss of £8.6m in 2014.