18 November 1997
BURTON GROUP AWARDS LONG-TERM LOGISTICS CONTRACTS TO TIBBETT & BRITTEN
The Burton Group plc has announced the appointment of Tibbett & Britten Group plc as its exclusive provider of warehousing, distribution and supply chain management services. Burton has awarded the UK-based international logistics specialist two large, long-term contracts starting in January 1998.
The Burton Group is one of the country's leading retailers of menswear, womenswear, childrenswear and housewares. It operates nearly 1,500 outlets in high streets and shopping centres throughout the UK, and its major brands include Debenhams, Burton Menswear, Evans, Dorothy Perkins, Principles, Hawkshead, Racing Green and Top Shop.
Following Burton Group's proposed demerger of Debenhams in January, the Group will assign the new contracts to Debenhams and Arcadia Group plc - the new name which is expected to be approved in January for the remaining Burton Group brands.
On completion of the transaction approximately 2,500 of the Burton Group's existing logistics management and personnel will transfer to Tibbett & Britten.
In addition, Tibbett & Britten will take over the management of the Burton Group's five regional distribution centres (RDCs) at Bedford, Brackmills (Northampton), Leeds, Lodge Farm (Northampton) and Milton Keynes. These are equipped with conventional boxed and hanging garment racking, as well as garment finishing and pre-retailing facilities. Ownership of the sites will remain with the Burton Group.
Tibbett & Britten will acquire the Burton Group's existing fleet of commercial vehicles - mainly Scania and Mercedes rigids with demountable bodies, plus some articulated and draw bar trunkers. Vehicles are in a variety of Burton Group colours, and are used for secondary distribution (store deliveries from the RDCs). Primary distribution (collection from suppliers into the RDCs) is currently handled by a series of 14 nominated carriers.
The agreement will result in significant mutual benefits. By outsourcing logistics the Burton Group will increase flexibility and will be able to better support both the proposed demerger and the future development of the businesses. For Tibbett & Britten the move reinforces its substantial presence in the UK clothing & textiles and retail logistics sectors. The result will be a long-term partnership between Tibbett & Britten and what are expected to be two of the UK's leading fashion retailers - Debenhams and Arcadia.
Commenting on the contracts, John Harvey CBE, Chairman and Chief Executive of Tibbett & Britten Group plc, said: "This supports our view that the UK sector continues to offer important new business opportunities. The combined contracts not only represent one of the larger logistics outplacements seen in the UK, but also underline the acceleration of logistics outsourcing as major companies focus on their core business strategies. We are looking forward to developing our partnership with both Debenhams and Arcadia, and especially to welcoming their very experienced and professional distribution team into the Tibbett & Britten fold."
John Hoerner, Chief Executive of the Burton Group, added: "These contracts are very exciting news for both Debenhams and Arcadia. They will enable us to increase the efficiency of our distribution operations. Our team of 2,500 highly skilled logistics staff will be transferring to Tibbett & Britten, an internationally recognised expert in logistics management. I am delighted that the proposed combination of their skills with Tibbett & Britten's will contribute to both their and our future success."
Tibbett & Britten Group plc is a UK-based international company providing distribution and logistical support services for major retailers and multi-national manufacturers. The British-based Group pioneered the transportation of hanging garments in this country in 1958, and has since grown to become a world leader in logistics across four main sectors: food, non-food FMCG, clothing and cars. It currently employs 24,000 people at 260 locations in 20 countries, and its retailing clients include: Asda, B&Q, Kroger, Marks & Spencer, Next, Promodès, J Sainsbury, Tesco and Wal-Mart. Projected revenue for 1997 is £875m (broker's estimate).
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