MARKS and Spencer has backed out of plans for a 900,000 sq ft port-centric warehouse at DP World’s London Gateway.
The decision to ditch the plan will be a bitter blow to the 9.25m sq ft London Gateway logistics site next to the new deep water port reports SHD Logistics.
The decision – which will save Marks & Spencer £130m capital investment – comes almost exactly a year after the deal was first announced in June 2013, and follows six months of ominous silence about whether a lease had been signed.
Speculation that the deal could be off first surfaced before Christmas. In March SHD Logistics reported that DP World had shrugged off the rumours, saying the Marks & Spencer plan was on track.
As recently as three weeks ago, a DP World spokesman told SHD Logistics: “The M & S deal is still very much on.” DP World referred to ground work underway and suggested further announcements would be made on progress in early May.
In March, M&S also dismissed speculation: “Everything remains as in the June 2013 announcement,” said a spokesman.
The statement from M&S read: “Following a thorough review of our plans, we have taken a decision not to proceed with the site at London Gateway and have developed an alternative plan.
“This will secure the delivery of the single tier network by 2016/17 as planned, by operating from the two new NDCs, at Castle Donington and Bradford, supported by four of the existing regional distribution centres which will be converted into NDC use. This will use our capital investment more efficiently, with a planned £130m reduction in investment whilst largely retaining associated benefits.”
Late last month Prologis formed a 50/50 joint venture with DP World to develop a 316,000 sq ft distribution centre at London Gateway Logistics Park. The new DC, which will be built speculatively, is designed to offer flexible distribution space.
The warehousing announcement comes as the retailer announces the third consecutive annual fall in profit. Underlying annual profit is down 3.9% to £623m.