UK’s Boohoo to stop supplying US customers locally

By James Davey

However, the company said on Wednesday it would return to fulfilling all U.S. orders from its automated centre in Sheffield, northern England, enabling it to cut costs over the medium term and broaden its product offering to U.S. shoppers.

“To us, the short life of the U.S. warehouse … is concerning, highlighting a naivety of the American market, along with a waste of time and resources,” Shore Capital analysts said.

Boohoo said the move would result in a write-down on its balance sheet against the investments and costs associated with the U.S. operation, as well as certain one-off exceptional cash costs. Further details will be given at its half-year results.

Analysts at Peel Hunt estimated a 34 million pounds ($44.5 million) capital expenditure write-off.

The company, like UK peer ASOS, was a winner during the pandemic, which drove a boom in online shopping. It has struggled since, hurt by supply chain problems, higher product returns, competition from rivals such as Shein and subdued consumer demand.

(Reporting by James Davey; Editing by Sarah Young and Mark Potter)