Marks & Spencer is exploring a deal for a giant new warehouse in the Midlands as the retailer looks to seize on booming online sales of fashion and homeware.
The retail giant, chaired by Archie Norman, is understood to have held talks over taking a jumbo-sized distribution facility in the centre of England amid expectations that more of its sales will take place online in future.
Property sources suggested M&S has been looking at around 1m square feet of space, with two sites near Northamptonshire being a particular focus. The sources cautioned that M&S had yet to make a decision on a deal.
The exploratory talks will be viewed as a sign that the retailer is laying the ground for a major upswing in online orders as it seeks to expand from its traditional bricks-and-mortar presence.
M&S already has around 9.4m customers who regularly use its website to buy online but has laid out ambitious targets to start growing that number rapidly.
The retailer has said it wants half of all its fashion and homeware sales to be taking place online. Currently, the majority of its sales in these departments are still taking place in stores, with around 33pc of orders coming online.
Stuart Machin, M&S chief executive, told The Telegraph earlier this year: “We think there’s a bigger growth opportunity online than we’ve got at the moment.
“We want customers to shop in a more digital way, we want the app to be easier. We want it to be more interactive.”
The company recently started making changes to its website to make it easier for customers to navigate, including making the pages load more quickly and stripping back the number of links people are seeing.
M&S’s attempt to drive up online sales comes after years of work on smoothing out its supply chain. This has included simplifying its distribution network.
At its latest capital markets day, the company said it had streamlined its operations from 16 warehouses and distribution centres for clothing and home in 2018 to 10 sites in 2023. It said this programme had saved it more than £45m.
However, bosses have suggested the company still needs to go further in bolstering its supply chain, telling investors in November there was still “more to do”.
It has been spending on adding more automation to warehouses in recent years. Within its Bradford centre, which is among its largest facilities with an estimated 1m square feet of space, it built a new automated warehouse.
A spokesman for the retailer said: “Modernising our supply chain is a key pillar of our strategy to reshape M&S for growth, so we always keep an eye on what’s in the market, but this is nothing more than that.”
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