Boohoo Group PLC (AIM:BOO) has announced that it will start fulfilling US orders from its “state-of-the-art automated distribution centre” in Sheffield, UK.
The British online fashion group made the decision to increase its product offering to US customers, who are currently only privy to 60% of styles available in the UK.
Boohoo anticipates a write-down on investments and costs associated with establishing its US distribution capabilities, but expects “a significant reduction in ongoing costs over the medium term”.
Its US distribution centre only launched in 2023 as a way of increasing next day and express delivery options for US customers.
The decision could spark some ESG concerns due to the impact on Boohoo’s carbon footprint.
Though the company already produces many of its garments in the UK before shipping them off to the US, it also buys garments manufactured in South Asia.
Boohoo was rapped on the knuckles earlier this year for inaccurately labelling garments as made in the UK.
The decision to bring US fulfilment to the UK reverts back to what the company did before the US warehouse opened, while emissions reductions are anticipated from the closure of the US site.
Boohoo intends to cease operations at its Elizabethtown, Pennsylvania distribution centre in November.