Shop Direct plans £200m automated DC at East Midlands Gateway

Shop Direct, whose brands include Very and Littlewoods, is to invest £200 million in a 500,000 sq ft automated distribution centre at East Midlands Gateway.

As a result it plans to close three existing site in the North West: Shaw, Little Hulton and Raven and it warned of redundancies among the 1,177 employees and 815 agency workers at these sites.

Shop Direct, which is a sister company of Yodel, has been transforming its business model from its origins as a catalogue retailer to pure-play digital retailer.

The new site’s position in the East Midlands, adjacent to the M1 and East Midlands Airport, with its own rail freight terminal, will enable the business to increase its cut-off time for next day delivery to midnight from the current 7pm, and to explore the introduction of same day delivery in the future.

It will handle all aspects of Shop Direct’s one-man fulfilment operation under one roof, including inbound, distribution, outbound and returns. It will employ about 500 people and use automation technology from Knapp to improve efficiency including processing new orders and returns faster than ever before.

Development at East Midlands Gateway is due to start in May 2018, and the group plans to begin exiting its existing fulfilment sites in Greater Manchester from mid-2020. The new site is expected to be fully operational by peak 2021.

Derek Harding, Shop Direct’s interim group chief executive, said: “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. 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.”

The 950,000 sq ft Shaw fulfilment centre was opened as a distribution centre for Littlewoods in 1979 and fulfils some five million order a year.

Little Hulton is a 330,000 sq ft facility opened in 1998 handling one million large one-man orders a year.

The 250,000 sq ft Raven returns centre was acquired with Great Universal Stores in 2003 and currently processes two million returns a year.