June 23, 2014 / 6:21 AM / 5 years ago

UK's ASOS reassures investors after warehouse fire

LONDON (Reuters) - British online fashion retailer ASOS sought to reassure investors on Monday, saying it had resumed taking orders on its website after a fire at its main warehouse on Friday led to a suspension over the weekend.

The firm said it started taking orders again at 2:00 a.m. (0100 GMT) and was fully insured for loss of stock and business interruption.

The fire at the firm’s Barnsley distribution centre in northern England came just two weeks after ASOS warned its full-year profits would miss forecasts by 30 percent.

A former darling of the retail sector, ASOS spooked investors in March when it announced plans to spend on infrastructure to meet future demand, at the expense of short-term profits.

Then the June 5 profit warning wiped 1.2 billion pounds off its stock market value.

ASOS said on Monday the Barnsley site held 70 percent, or 111 million pounds ($189 million), of the business’ 159 million pounds of total stock at cost.

It estimated that approximately 20 percent, or 22.2 million pounds, of the total stock at the site had been compromised by fire damage and the sprinkler systems.

However, none of the technology, automation or structure of the building was affected by the fire.

“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 inquiry,” said ASOS.

“We are cooperating fully with this investigation.”

ASOS’ management, led by Chief Executive Nick Robertson, has experience in dealing with a similar business disruptions. In 2005 the retailer’s then main warehouse, at Hemel Hempstead in south east England, was severely damaged by an explosion at the nearby Buncefield fuel depot.

However, at the time, ASOS was much smaller and the online industry was in its infancy. ASOS now has many more competitors, while customers’ expectations for order deliveries are much higher.

Shares in ASOS, down 39 percent over the last month, were up 0.3 percent at 2,759 pence after falling as much as 3.1 percent in early trading, valuing the business at 2.3 billion pounds.

Analysts noted the full insurance cover and pointed out that late June was not a particularly busy time of the year for the firm.

Cantor Fitzgerald analyst Freddie George said he was retaining his 2014 pretax profit forecast of 46 million pounds, assuming that any stock loss will be covered by insurance.

He retained his “hold” stance but cut his target price to 2,500 pence from 3,500 pence.

($1 = 0.5876 British Pounds)

Reporting by James Davey; editing by Kate Holton

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