Boohoo embraces automation at new Burnley DC

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Fashion retailer expects to start operations at the extension to its Burnley distribution centre early next year.

The group increased sales by 97 per cent to almost £600m last year and is developing a distribution network capable of handling some £3 billion of sales globally.

The new166,000 sq ft building is now undergoing fit-out, it said in its results for the year to 28th February.

“A key aspect of the new facility will be the introduction of a significant amount of automation, which will greatly improve picking efficiency and have a short payback period on the capital invested. The enlarged facility will be sufficient for an operation capable of generating over £1 billion in net sales.

“We have also opened substantial employee welfare facilities at the distribution and customer services centre, which includes a gym, exercise studio, leisure facilities and subsidised canteen.”

The group is to relocate the inventory for its PrettyLittleThing brand to a Clipper-managed warehouse.

“This brings incremental sales capacity in addition to our Burnley operations, will help underpin PLT’s infrastructure needs and adds further operational flexibility for the group as we continue to invest in our future distribution network. Project planning for future storage requirements is well under way with a project team working on the next phase of distribution centre development.”

Joint chief executives Mahmud Kamani and Carol Kane said the moves represent “a significant milestone as we develop a distribution network capable of generating £3 billion of net sales globally, in line with our vision to lead the fashion e-commerce market.”

Last year, group revenue rose 97 per cent to £579.8 million while operating profit (EBIT) was up 61 per cent to £50.4 million.

It said group revenue growth for the next financial year (FY19) is expected to be 35 per cent to 40 per cent with adjusted EBITDA margin between 9 per cent to 10 per cent and capital expenditure of £50 to £60 million.

“Looking beyond the current year we will continue to lead the market on value, service and proposition in all our key geographies. While this will require a continued investment in people and infrastructure, we believe that the benefits of our investments in marketing and warehouse automation will generate economies of scale to allow us to drive sales growth of at least 25 per cent, while maintaining a 10 per cent EBITDA margin.”

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