Toymaker Hornby is to close its warehouse in Margate and move to a third party warehouse run by DS Logistics.
It said the existing warehouse lacked outside space to allow transport access. There was also a lack of IT infrastructure upon which to run modern warehousing systems and a building with significant repair and maintenance issues has led to a review of the site.
Chief executive Richard Ames said: “The proximity of the [DS Logistics] site to Margate, 11 miles from the current building, means that we are able to offer roles to all existing Hornby staff and retain this wealth of experience within the operation. This is a key decision for the company, and one not taken lightly, given the history and tradition of the current site. Nevertheless, we are confident that this move will facilitate a significant improvement in the handling and distribution of the company’s product, not only in the UK but also, as we progress, for the broader group in Europe.
Hornby has faced challenges in its Asian manufacturing and supply chain.
Ames said: “As we have reported previously, we have increased our number of manufacturing sites and we are now bringing the production from these partners to market. The complex nature of the model manufacturing process and the length of the supply chains involved has meant that the initiatives, started in 2013, have not delivered results in the financial year. However, they have created the foundation upon which improvements in 2014-15 can be built.”
The company, whose brands include Scalextric, Hornby and Airfix, has reported an underlying loss of £1.14m for the year to 31st March 2014 on sales down to £51.6m from £57.4m in 2013.