Department store group House of Fraser has today renewed its contract with DHL Supply Chain in a deal that will see the retailer increase the size of its distribution network and operate a warehouse dedicated to its growing online offering.
Worth £85 million over the course of the next five years, the new deal is an extension of a seven-year supply chain partnership between the two businesses and exemplifies the fast rate at which House of Fraser’s multichannel operation has expanded in the last year.
As part of the new contract the retailer’s existing Milton Keynes distribution centre (DC) will now only stock products for the company’s online business, while DHL will provide an end-to-end supply chain management service for its stores from a newly refurbished 245,000 sq ft warehouse in nearby Wellingborough, Northants.
DHL secured the property for House of Fraser, began the fit-out process in April and is set to be fully operational at the site later this month, with 235 extra jobs created by the restructuring.
The need for a separate storage and logistics location for its e-commerce platform comes after the department store group reported significant growth in multichannel sales during its last financial year.
Having increased the number of brands it sells online by more than 50 per cent over the course of the year, multichannel sales were up 130 per cent compared to 2009/10.
EBITDA increased from £59.4 million to £85.7 million year-on-year, with sales of own brands up by 50 per cent to help improve margins.
Paul Richardson, Managing Director of DHL Supply Chain’s Fashion Division, commented: “We are very pleased to continue our relationship with House of Fraser, particularly as the company expands its online sales footprint.
“The multichannel space is one where our considerable experience will undoubtedly help support House of Fraser’s future growth plans.
“We are delighted to play such a key part in expanding the operational efficiency and effectiveness of its logistics operation.”