Boohoo closing UK distribution centre, report suggests

Fashion etailer Boohoo is set to close its Wellingborough distribution centre at the end of next February, putting around 1,000 jobs at risk.

According to reports in Drapers, the 287,634 sq ft distribution centre on the Park Farm Industrial Estate is closing as a cost-saving measure and as a rationalisation of Boohoo Group’s warehouse estate.

The site was only opened in April 2021 to service its Boohoo, BoohooMan, MissPap, Karen Millen, Coast, Dorothy Perkins, Oasis, Burton, Wallis and Debenhams brands. Drapers reported it is not yet clear what the future will hold for the workers at the site, but understands they are being offered the option of re-employment at the Boohoo’s other three UK warehouses.

Boohoo Group last year opened its fourth warehouse in Daventry, Northamptonshire – the same site as Arcadia Group’s old warehouse. Its other warehouses are located in Burnley and Sheffield, and it has partnered with DHL Supply Chain to help grow its business in the US with a new stateside warehouse.

In October, the retailer announced it has chosen DHL Supply Chain to manage its first-ever US distribution centre, as it expands into the United States. The new 1.1 million sq ft site in Elizabethtown, Pennsylvania, will open in early 2023.

However, it also reported a loss for the first half of the year, swinging to a £15.2m pre-tax loss from a £24.6m profit a year earlier. The retailer has also warned that sales are likely to fall further over the rest of the year with adjusted EBITDA margins likely to be between 3 and 5%.

Revenue fell 10% year-on-year to £882.4m from £975.9m. This was, however, up 56% on pre-virus levels. 

In the UK market, revenue declined by 4.4% to £544.6m from £569.6m, due to “softening through the second quarter as inflationary pressures increased and consumer demand appears to have been impacted by cost of living pressures”, the company noted in a statement.

At the time John Lyttle, Boohoo CEO, said: “Performance in the first half was impacted by a more challenging economic backdrop weighing on consumer demand. Over the last three years the group has seen significant gains in market share achieved across our brand portfolio, particularly in the UK.

“We have a clear plan in place to improve future profitability and financial performance through self-help via the delivery of key projects, which will stand us in good stead as macroeconomic headwinds ease. We remain confident in the long-term outlook.”

Image Credits:
Boohoo Group

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