An ecommerce group behind the Aosom and Homcom brands has decided to reverse its previous decision to close one of its UK distribution centres following a rise in sales. MH Star UK, which operates under the Chinese conglomerate Aosom Ecommerce, announced that its Bedford Two warehouse, which had been earmarked for closure, was redeployed towards the end of 2024 due to increased sales and stock volumes.
Photo: MH Star.
The company had made a provision of £1.3 million in 2022 for an onerous lease when it initially decided to sublet the facility, one of eight warehouses it operates in the UK. However, as sales began to rise, MH Star UK reassessed its position, resulting in the reversal of the lease provision. In 2022, the company reported a sales figure of £166.7 million, but this increased by 10% to £183 million in the following year. The company's recently filed accounts suggest that its sales may have continued to grow since then.
MH Star UK sells a range of furniture and other products on various third-party platforms such as Amazon and Wayfair, in addition to operating its own ecommerce channels. The company, based in Greenford, Middlesex, has also made strides in reducing its operating losses, narrowing them to £1.1 million in 2023, compared to £12.6 million in 2022. Despite these improvements, a writedown in the value of its US business meant that the company's net loss remained relatively unchanged, at around £10 million.
In addition, MH Star UK disclosed that £15 million out of a £23 million share issue, which was revealed by The Furnishing Report last July, was allocated to support its subsidiaries in Europe, rather than its UK operations. This development highlights the company's focus on strengthening its European presence while continuing to maintain a presence in the UK market.
While the UK operation has faced its challenges, the decision to reverse the warehouse closure is a positive sign for MH Star UK as it continues to navigate the competitive ecommerce landscape. The company's ability to adapt and capitalise on rising sales could prove crucial as it looks to build on its recent growth.
Source: www.thefurnishingreport.com