Marks and Spencer Group PLC (LSE:MKS) has struck a deal to buy a fulfilment centre in Staffordshire from online fashion retailer ASOS PLC (LSE:ASC) for £67.5 million.
ASOS, which had mothballed the site as part of a wider overhaul of its operations, said the move was part of its continued efforts to strengthen its balance sheet and cut costs.
It said the disposal will generate net proceeds of at least £66 million and annual cash savings of about £6 million from lower rent and occupancy costs, with its remaining warehouse sites in Barnsley and Berlin providing enough capacity to support future growth.
The transaction is expected to deliver a one-off profit before tax of about £85 million after adjustments linked to property liabilities.
ASOS said the proceeds would improve financial flexibility following its refinancing last November and the repayment of convertible bonds last month, with cash levels standing at £209.5 million at the beginning of March. Pro forma net debt, excluding lease liabilities, is expected to fall to about £228 million after the sale.
Jose Antonio Ramos, chief executive, said the transaction was "consistent with the actions we have taken over the past three years to simplify the business and enhance financial resilience".
Completion is expected in the second half of the 2026 financial year.
Marks & Spencer said the 437,000 square foot site will open in 2027 as a "state of the art...fully automated" distribution centre, employing 600 people as part of the group's aim to double the size of its online fashion business.
The site will add capacity and process orders quickly, the FTSE 100 group said, supporting the strategy to deliver more fashion items faster than before, enabling customers to order later in the day and with more sizes and styles available.
ASOS shares rose 8% and those in M&S fell 1.7%.
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