📉 Boohoo ends US local supply
On Sept. 11, 2024, Boohoo announced it would no longer supply its U.S. customers from its Pennsylvania warehouse. The closure is scheduled for Nov. 11, a year after the center was hailed as a "gamechanger" by CEO John Lyttle. Boohoo will now serve U.S. customers from its UK warehouse in Sheffield. The news sent Boohoo shares down 2%, extending its 2024 losses to 32%.
💸 Financial impact of the closure
The decision will result in a substantial write-down. Analysts at Peel Hunt estimate a $44.5M write-off related to capital expenditures and costs tied to the U.S. warehouse operation. Boohoo has not yet provided specific details but confirmed the move will be discussed during its half-year financial results.
🔄 Strategic shift to cut costs
Boohoo's reversal comes as it aims to cut medium-term costs by centralizing U.S. operations back to the UK. The company cited that its automated Sheffield center will help reduce overhead while broadening its product offerings to U.S. customers. Despite the closure, Boohoo remains optimistic about its U.S. presence and future growth opportunities.
🛍️ Nasty Gal in Nordstrom stores
In line with its new strategy, Boohoo is expanding its U.S. presence through partnerships. It recently launched its Nasty Gal brand in Nordstrom stores, and further collaborations with major U.S. retailers are in advanced talks. Boohoo hopes to rebuild its U.S. market share, which has been impacted by competition from brands like Shein, supply chain issues, and rising product returns.
Do you think Boohoo can recover in the U.S. market?
