M&S to shake-up clothing supply chain with new centre

LONDON (Reuters) - Marks & Spencer MKS.L said on Wednesday it would open a huge new clothing and homeware logistics centre in 2019, as part of the British retailer's strategy of simplifying its distribution network.

FILE PHOTO: Pedestrians walk past a Marks & Spencer store on the Champs Elysees avenue in Paris, France, November 8, 2016. REUTERS/Philippe Wojazer/File Photo

M&S revised its strategy in November, two months after retail veteran Archie Norman joined as chairman, saying it needed further changes to modernise the clothing and homeware supply chain to reduce costs and make it faster.

The firm said it would open a 495,000 square feet mechanised clothing and homeware distribution centre at a former Tesco TSCO.L site in Hertfordshire, southern England, next year.

The centre, serving 150 M&S stores, will be operated by a third-party logistics supplier, employing more than 500 people.

The move forms part of M&S’s strategy to create a “single-tier” clothing and homeware distribution network, where products from suppliers go directly to warehouses and then straight to stores, which means the retailer only moves products once.

With its existing system, the retailer moves clothing more than once to reach stores.

As part the logistics shake-up, M&S said it would cease operations at its Neasden distribution centre in London.

M&S said Neasden’s closure was not directly related to the Hertfordshire opening. Neasden’s work would be transferred to other sites in the M&S network, it said.

The Neasden site is run by XPO Logistics with transport operations provided by DHL. Both companies have entered into a period of consultation with the site’s 380 workers.

M&S declined to comment on the cost of the programme. The firm guided in November that capital expenditure for the full year 2017-18 would be 300 million to 350 million pounds.

Last week M&S disappointed investors with its Christmas trading update.

Reporting by James Davey; Editing by Edmund Blair