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Marks & Spencer has agreed to buy a warehouse from ASOS in a move which will see the retail giant generate 600 jobs and support plans to double online sales. M&S said the 437,000 square foot site in Lichfield, Staffordshire, will be one of its largest distribution centres when it opens in 2027.

The warehouse was mothballed by ASOS in 2023 under an overhaul to reduce its stock and costs to improve profitability. It employed a few hundred workers at the time, but the online retailer said when it announced the move that workers were not directly employed by the group.

M&S said the site will add capacity and allow it to process orders quickly, helping it achieve the group's long-term target to double the size of its online fashion, home and beauty business.

The chain said in a statement: "The new site will support the strategy to deliver more of M&S fashion faster than ever before, enabling customers to order later in the day and with more sizes and styles available."

John Lyttle, Managing Director for Fashion, Home and Beauty, said: "As we transform M&S fashion, home and beauty, our ambition is to double online sales.

"To achieve this and serve our customers faster, more efficiently and with better availability, our 24/7 distribution network needs more capacity."

He said the move would help with its transformation plans at a lower cost than building a site from scratch.

ASOS said it will receive at least £66million in proceeds from the warehouse sale and save around £6m in costs each year, such as rent.

This will lead to a one-off profit boost of about £85m when the deal completes, which is expected by the end of August.

The firm said its remaining warehouses in Barnsley, South Yorkshire, and Berlin will "provide sufficient capacity to support future growth".

ASOS Chief Executive Jose Antonio Ramos said: "The disposal of our Lichfield fulfilment centre represents a further step in strengthening Asos's balance sheet and improving our capital efficiency.

"This transaction enables us to unlock value from one of our non-core assets while reducing our ongoing cost base, consistent with the actions we have taken over the past three years to simplify the business and enhance financial resilience."