Asos share price holds steady as it confirms the fire WAS deliberate

The company announced this morning that it lost 22 million pound of stock in the fire - and that police have started a criminal enquiry.

by Emma Haslett
Last Updated: 16 Sep 2014

- 'We have to re-earn the stock market's trust', says Asos chairman Brian McBride

Unpleasant scenes in Barnsley over the weekend, after one of Asos' largest warehouses - 'the centre of our distribution capability' - went up in flames. As a result, the company - which is already in investors' bad books after it issued a profit warning earlier this year - closed down its website over the weekend (although service was restored at 2am today. Phew). This morning, shares lost 2% in early trading, although they later bounced back to just over their closing price on Friday. 

In a statement to the stock exchange this morning, Asos confirmed that it was bad news: as of the end of May, the company held £159m of stock, of which 70% was in the Barnsley warehouse, it said. About 20% of the contents of the warehouse was fire damaged. That's £22m of stock which has, quite literally, gone up in smoke.

This isn't actually the first time something like this has happened to Asos. In 2005 the retailer's Hemel Hempstead warehouse was all but demolished by an explosion at the Buncefield Oil Refinery, which damaged £5m of stock - just before Christmas.

This time, though, the company reckons the damage was intentional.

'We have been advised by the South Yorkshire Police that after initial investigations, they are treating the incident as deliberate and have commenced a criminal enquiry.'

Crikey. It's bad news for Asos: even if investors' reactions were less extreme than expected, Asos shares have performed appallingly over the past few months (as you can see in the chart below). Let's just hope the arsonist wasn't an investor, bent on getting his revenge.


Source: Google

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