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HEMA sales hit by transition to new distribution centre

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Dutch department store HEMA saw its online performance hampered in its full year results as it moved operations to a new automated distribution centre.

Overall, net turnover rose 2.8% in 2018 to reach €1.27 billion.

Online sales were up 10% year-on-year in Q4 and down 0.5% in Q3, with HEMA saying the growth rate had been impacted by “constrained capacity”.

A breakdown of the results show that the company invested 12% of its capex or €5.9 million into a distribution centre, called an eDC, in 2018, after investing €7.7 million in 2017.

The company has introduced robotics into the warehouse as part of a two-year investment programme to expand capacity. It has also introduced a new ecommerce platform for the centre.

Unspecified mishaps in the launch phase of the new technology happened to coincide with peak period, reducing sales, but HEMA said “good productivity” was now visible.

However, its biggest expenditure was on physical assets, with 25% of capex going on new stores and 29% on refurbishments. HEMA also plans to introduce initiatives to physical stores such as self-checkouts and electronic price tags to improve customer convenience and allow cost reduction.

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