Boohoo Group Plc announced that it has completed the sublease of its distribution centre in the United States to ID Logistics, a global third-party logistics (3PL) operator. The 1.1 million sq. ft distribution centre in Elizabethtown, Pennsylvania, opened in August 2023 and was operational for approximately 15 months.

The Group ceased operations on November 11, 2024, with fulfilment of US orders returning to the UK. To date the Group has incurred approximately $124 million of costs at the site, covering rent, operating costs and capital investment. The facility, which is surplus to the Group's operational requirements, carries approximately 8.5 years remaining on the lease term, representing approximately $100 million of future lease and holding costs.

The Sublease materially reduces the Group's future cash obligations while securing a long-term occupier for the site, with ID Logistics expected to commence occupation on August 1, 2026 until the end of the Group's lease. The transaction has resulted in an unaudited non-cash exceptional credit of approximately GBP 40 million to the income statement relating to the recognition of an asset on the balance sheet for the future sublease payments, which (subject to audit confirmation) will be reflected in the Group's First Half results. The Sublease represents a key step in reducing the Group's future annual lease costs.

The Group's lease costs in the current year will be GBP 13 million, which will further reduce to GBP 8 million in Fiscal Year 2028 and GBP 6 million in Fiscal Year 2029 as the benefits of the $9.5 million average annual rent income under the Sublease are fully realised. The GBP 6 million ongoing lease costs will include the fully automated Sheffield warehouse, the Manchester head office, as well as a small London footprint. Other costs of approximately $20 million associated with the Group's lease obligations will be covered under the terms of the Sublease.