Shop Direct today unveiled plans to build a new automated distribution and returns centre in the East Midlands as it looks to enable faster deliveries – and to close three fulfilment sites in Greater Manchester.
Redundancies are expected as a result of the move on the part of the home shopping group, whose brands include Very and Littlewoods.com.
Shop Direct says the new site will enable it to process more orders and become more responsive through the use of new technology. The new site is also located near to the M1, East Midlands Airport and has its own rail freight terminal, meaning the cut-off time for next-day delivery will be able to move to midnight from the current 7pm, and to explore same-day delivery in the future.
Work on the new site, at East Midlands Gateway, is expected to start in May and to be fully operational by the peak shopping period in 2021. It plans to start moving out of its existing fulfilment sites, affecting 1,177 permanent members of staff and 815 agency workers, from mid-2020. The new site will employ about 500 people, adding between 200 and 300 agency staff during peak periods.
Development of the new site is due to start in May 2018, and the group plans to begin moving out of its existing fulfilment sites in Greater Manchester from mid-2020. The new site is expected to be fully operational by peak 2021.
The decision comes at the end of an 18-month project to review fulfilment sites at Shaw, Little Hulton and Raven. That concluded that limited accessibility, layout, loading restrictions and space meant that the centres that have supported its growth from a catalogue business to one that saw more than half of its sales made via mobile in its latest financial year, would not meet its future operational ambitions. Instead, it now needs a new, purpose-built and automated facility with space for existing and future fulfilment and returns operations.
“This is a tough day for the business and we know how difficult this news will be to hear for our teams in Shaw, Little Hulton and Raven," said Derek Harding, interim group chief executive of Shop Direct. "However, these proposals are necessary for our future and to enable us to continue to grow and meet rising customer expectations.
“We take very seriously our responsibilities to our colleagues, many of whom have been with us for a long time and who work tirelessly to deliver for our customers. We are working alongside Usdaw, our recognised trade union, and will listen carefully to what they have to say. We’ll also work closely with local authorities and community leaders to make sure this process is carried out as fairly and sensitively as possible for our colleagues.
“We’re announcing this now to give our colleagues the best possible opportunity to prepare for the change. Over the next two to three years, we’ll be partnering with local and national organisations to provide our colleagues with tailored advice and training, including career skills, access to financial planning and vocational courses to support re-training. It’s also our plan to offer apprenticeships in in-demand skills across our existing operational sites.
“Our priority is to provide a fair outcome for our team and we’ll do everything we can to support colleagues through this transition.”
Shop Direct has entered into consultation with trade union Usdaw about the closure of the existing sites.
Mike Aylward, divisional officer, Usdaw, said: “Our members are understandably shocked and devastated by today’s announcement of the proposed closure and relocation of the Shop Direct sites. The company has been providing employment for families in the North West for many decades and these sites have different generations of the same families working there. The impact of closures will be huge on hundreds of families, local businesses and the local communities.
“We are seeking an urgent meeting with the company to look at the business case for the proposed closures and we will look to mobilise the support of local MPs and councillors.
“The Union has officials onsite to provide help, advice and support at this very difficult time.
“Today’s announcement is also a very sad day for the North West as Shop Direct was created from the merger of the iconic mail order and retail giants, Littlewoods and Great Universal Stores and these are the company’s last remaining fulfilment sites in the region.”