Debenhams to close one DC and ten small warehouses

The cut in warehouse capacity comes as Debenhams announced a 6.4% drop in profit to £87.8m (H1 2016: £93.8m).

The streamlining of operations feeds into a new strategy unveiled by the retailer – Debenhams Redesigned – which is designed to deliver revenue growth by turning the brand into a ‘destination’ and ramping up digital sales.

Debenhams is investing in automation within its warehouses and expects to complete its roll out in FY2020.

Debenhams expects to spend an additional c.£50m on improvements from 2018-2020, of which supply chain is one of three key areas, along with upgrading mobile systems and store estate.

The review of operations is cutting in-store SKUs by 10% and working to speed up replenishment times from an average of eight days to two days.

The company said: “As a result of more efficient stock flows combined with the transition to a single WMS, consultation has begun on the closure of one central distribution centre and around 10 smaller regional warehousing facilities.”

Sergio Bucher, chief executive of Debenhams, added: “Having simplified our operations to make us more efficient, we will be able to serve customers better and make better use of our resources.”