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Shop Direct to invest in new automated distribution centre in East Midlands

Shop Direct is to close its three existing fulfilment centres in Greater Manchester and invest instead in a new automated, 500,000 sq ft distribution centre in East Midlands.

Development of the new site, which is at East Midlands Gateway, is due to start next month with the company beginning its exit from its sites in Shaw, Little Hulton and Raven from mid-2020. The new site is expected to be fully operational by peak 2021.

The existing sites were deemed to not be fit to support the group’s future operational ambitions because of limited accessibility, layout and loading restrictions as well as a lack of space. The move is expected to impact more than 1,000 permanent Shop Direct staff and 815 agency staff with redundancies expected.

The company said that to continue to meet customer demand, the business required a purpose-built and automated facility in a central, well-connected location.

The 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. Approximately 500 permanent roles will be created at the new site, with the addition of around 200 to 300 staff at peak.

Derek Harding, interim group CEO of Shop Direct, said the company was working closely with Usdaw to help those affected by the closures of the existing sites. “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’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,” he said.

ABOUT THE SHAW, RAVEN AND LITTLE HULTON SITES

Shaw fulfilment centre – one-man collated product (smaller parcels, often with multiple items)

  • 705 Shop Direct colleagues, with 636 agency colleagues
  • 950,000 sq. ft.
  • Occupies three converted former mills and two stock handling and sortation facilities
  • 5m orders fulfilled per annum
  • Opened as a warehousing and distribution centre for Littlewoods in 1979

Little Hulton fulfilment centre – one-man non-collated product (large, one-man orders)

  • 59 Shop Direct colleagues, with 43 agency colleagues
  • 330,000 sq. ft.
  • Occupies two warehouse units
  • 1m orders fulfilled per annum
  • The company began operating at Little Hulton in 1998

Raven returns centre – one-man returns

  • 413 Shop Direct colleagues, with 136 agency colleagues
  • 250,000 sq. ft.
  • Occupies one converted former mill
  • 2m returns parcels processed per annum
  • Raven was a Great Universal Stores site when the business was acquired by Littlewoods in 2003

ABOUT THE NEW SITE

The new fulfilment centre at East Midlands Gateway will move all aspects of Shop Direct’s one-man fulfilment operation under one roof, including inbound, distribution, outbound and returns. The facility, which is expected to require a total investment of around £200m, will host approximately 500 permanent colleagues and use the latest in automation technology from Knapp, improving efficiency in Shop Direct’s fulfilment operation, including processing new orders and returns faster than ever before.

Image credit: Shop Direct

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