Bad news for J.Crew: UK fast-fashion giant ASOS is making a big play for the US

Millennials love ASOS.
Millennials love ASOS.
Image: ASOS
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ASOS, the UK’s largest online fashion retailer, is building a giant new fulfillment center in the US that will serve as a launching point for a major push into the country.

The US accounts for about 12% of ASOS’ total sales, but American sales jumped 50% (pdf) last year, and ASOS has already become a favorite place for US millennials to shop. That makes the US a big opportunity for the British company, which wants to bolster its international business as Brexit threatens to squeeze its income in the UK, still the single largest source of sales. The new facility, which CEO Nick Beighton called “a major step forward for ASOS in the US,” suggests the company plans to speed up its US growth.

Gap and J.Crew should worry. Those labels are losing market share to fast-fashion brands, such as Zara and H&M, which get more of the clothes shoppers want into stores faster. Now they’re threatened by ASOS, which according to a recent analysis by Goldman Sachs, is even quicker than Zara and H&M at designing new clothing and putting it on store racks.

ASOS rotates a staggering amount of clothing through its website. Last year it released around 4,000 new items every week (pdf), including its own line and a wide selection of clothes, shoes, and accessories from 850 other brands, ranging from large labels like Adidas to smaller ones such as Missguided. “We are the largest fashion label without a store,” ASOS’ global trading director, Nicola Thompson, told Racked earlier this year, “and that is because of the sheer volume of what we can offer.”

The new fulfillment center, which has an initial investment of $40 million, will be able to handle 10 million items. It will also allow ASOS to be even quicker at fulfilling orders for American shoppers.

ASOS' Barnsley, UK, warehouse
ASOS’ massive fulfillment center in Barnsley, England.
Image: ASOS

The facility won’t be quite as large as ASOS’ global fulfillment center in Barnsley, England, but the company expects it to create more than 1,600 jobs over the next five years in the area around Union City, Georgia, where it will be located.

ASOS’ Barnsley center has been a sore subject for the company over the last year, after a Buzzfeed investigation accused ASOS of using exploitative worker contracts and claimed it had workers laboring so hard to fulfill orders that they were unable to take bathroom or water breaks. The company called the claims “inaccurate.” We have reached out to ASOS for comment and will update this story with any reply.