Tuesday 25th Oct 2016 - Logistics Manager

Comet targets £10m supply chain savings

Comet expects to save £10 million a year from its restructuring plans, which include the closure of its Corby distribution centre.

The retailer plans to consolidate its 14 regional service centres to two sites, and to reduce the warehouse network from three to two as part of a recent retender of logistics services as well as reducing head office head count.

In its year-end trading statement, parent group Kesa Electricals said: “These measures while reducing costs by an expected £10m on an annualised basis will also enhance customer service levels. An exceptional charge totalling £20m will be taken, £18m of which in the year just ended. There will be a £2m cash cost in the year just ended and £11m in 2011/12.

Comet announced last month that it had extended its contract with Wincanton to take over its entire distribution operation.

The moves are part of a package of restructuring plans across Kesa aimed a producing annual cost savings of 18m euros a year.

At BCC in the Netherlands a number of measures are being taken to reduce costs by an annualised €4m in parallel with reviewing and improving the commercial policy. In Spain it is closing six stores to focus on its store portfolio in Madrid and Galicia.

While Darty in France performed well in the fourth quarter, Comet’s sales in the UK fell 14.5 per cent reflecting the difficult market conditions in the UK, particularly following the VAT increase.

Chief executive Thierry Falque-Pierrotin said: “In the UK, market conditions remained particularly tough and we have accelerated our plans at Comet to reposition the business and reduce our cost base.

“In market conditions that have remained challenging, we have demonstrated the strength of the Darty concept with strong performances and overall market share gains at Darty France and the Other established businesses together with the improvement of our positions in the developing businesses.”

You can discuss this on the Supply Chain Standard Linked In discussion.