DHL Supply Chain remains a key partner of Marks & Spencer (M&S) as the high street retailer’s transition towards a single-tier distribution network gathers pace.
With the planned closures of 110 stores announced last month, comprising 85 full stores and 35 Simply Food branches, M&S CEO Steve Rowe said the retailer was now deep into the first phase of its transformation programme.
“While there are green shoots, we have not been consistent in our delivery in a number of areas of the business,” he said.
Key to the transformation is reducing the complexity of its logistics network, which led to the closure last year of four DCs and warehouses, including its Neasden DC, operated by XPO Logistics with DHL Supply Chain supplying the transport.
The closure of two DCs alone led to a net charge of £14.3m, which M&S said was “for redundancy, accelerated depreciation and project costs”. Further charges of approximately £12m are expected for 2019/20.
However, DHL Supply Chain has not been left on the shelf. Earlier this year, M&S opened a national DC in Welham Green, which it said is“ramping up its boxed storage capacity”.
M&S confirmed to motortransport.co.uk that the 3PL was operating the Hertfordsite site.
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The investment in Welham Green led to the retailer’s supply chain capital expenditure more than doubling to £48.7m in 2018, but it has helped move M&S towards a single-tier network for Clothing & Home while improving its capabilities at Castle Donington.
“We are still at the early stages of modernising our supply chain network, technology and process and this remains a priority,” the retailer said in a statement.
An M&S spokeswoman told motortransport.co.uk the rationale behind the single-tier network was to make the retailer faster, more agile and reduce costs.
She said: “A single-tier network ‘moves’ or ‘touches’ a product once and is more effective than a network that moves or touches products more times.”
A DHL Supply Chain spokeswoman said: “DHL continues its relationship with M&S and remains a strategic partner in its supply chain network, including operating its Welham Green site.”
XPO Logistics declined to comment.
