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28 July, 2006 - 09:40 By Staff Reporter

John Lewis announces plans for £45m distribution centre in Milton Keynes

The John Lewis Partnership's Department Store division has announced plans to open a £45 million automated distribution centre in Milton Keynes in 2009 at Gazeley and Land Securities' Nova MK logistics park development.

The new 650,000 sq ft DC is a major part of the company's programme of supply chain investment, supporting the plans to open ten new shops in 10 years, and accelerating improvements in productivity, availability and customer service.

Patrick Lewis, supply chain director John Lewis, said: "To win in our market, we need to continually improve our service. For the supply chain this means improving availability and at the same time reducing our costs so that we can invest in front line service.

"This development gives us the space we need to increase the scale of our business, and allows us to provide better service to our shops and customers at a lower cost."

The DC's automation equipment will be provided by Knapp Logistik Automat-ion GmbH, and will deliver the capability to cost effectively issue stock little and often, based on demand. It will also allow John Lewis to fulfil more items direct to customers from its central DCs, improving customer service and consolidating the company¹s position as a leading multi-channel retailer.

Mike Cogger, MD of Knapp UK, said: "Knapp is delighted about this opportunity. The final design for the new DC is a direct result of the long term, intensive and close working partnership established between the Knapp and John Lewis project teams.

"The system provides headroom for future store expansion and we believe the solution will provide an excellent service to John Lewis, in order that they in turn, meet the needs of the customer."

The new DC will occupy 650,000 sq ft (60,386 sq m) and is due to open in the first half of 2009. It will form part of Gazeley's Nova Park development at M1 J13 near Milton Keynes.

As well as providing modern and flexible warehouse space, the development will include an extensive range of eco-friendly enhancements, supporting John Lewis's aim to improve the environment in which they trade.

Nigel Godfrey, development director, Gazeley, said: "It has taken Gazeley and its partner, Land Securities, 10 years to bring Nova Park in Milton Keynes to fruition and we intend to create a sustainable flagship national distribution centre development that will inspire the whole industry.

"To have the opportunity to work with John Lewis on a first unit of 650,000 sq ft is a great start. The building will incorporate a range of design initiatives which will contribute to a projected saving of 66 per cent of C02 emissions and a significant reduction in energy costs when compared with a standard unit.

"The building is being leased for 20 years and is scheduled for completion in June 2007. Gazeley will undertake a £7 million fit out of the building. A reserved matters planning application will be submitted in the next few days."

The DC will handle stock which is currently held in John Lewis¹s Stevenage warehouse. The Stevenage facility will remain as a storage depot for larger items of stock, and the company will invest £3.5 million to refit the warehouse for its new role and update its computer systems.

As a result of this development, it is estimated that up to 60 redundancies may be made from the Stevenage warehouse during 2009. All partners will be offered the opportunity to transfer to the new DC, and the partnership will do all it can to keep this reduction in numbers as low as possible.

Dino Rocos, managing director distribution, John Lewis said: "We are proud of the dedication of our Partners who have enabled us to position ourselves as a market leading in-house distribution service.

"A further step change, which automation will provide, is now required if we are to continue to lead in this important aspect of our customer offer.

"We will fully support any Partners whose jobs are affected in seeking alternative opportunities for employment in the business over the next three years, re-skilling and retraining, and if necessary preparing for employment outside the partnership.

"Everything will be done to ensure this number is kept as low as possible."

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