Spicers Update

December Fundraising Activity
January 7, 2019

New CEO

We are delighted to announce the appointment of Steve Horne as CEO of the SPOT Group. Steve joins us from Euro Car Parts Group Limited where he was Chief Operating Officer, and he has previously held senior roles in Unipart Automotive and Wickes Building Supplies. Steve brings extensive experience in sales, successfully growing businesses organically, through M&A and by new channel development. He is also very experienced in supply chain and business transformation. He will join us on 4th March, and we look forward to welcoming him to the team.

Steve commented “I am very excited about joining the SPOT Group, where the history of the company complemented by the expertise and commitment of the team, gives a great foundation for the future”.

Network Review

As a business we are continuously looking at how we service our dealers to ensure we provide an efficient and competitive service in an increasingly competitive and commoditised market, we recognise that getting it right first time, every time needs to be our core objective.

To drive this service improvement and unlock duplicated costs, we have had to re-consider our national infrastructure. This review has been further exacerbated by significant rental increases on either rent reviews or rent renewals, as well as cost pressures in a number of areas, including difficulties in recruiting/retaining staff, price increases in packaging, fuel and third party logistics costs and spreading stockholding over multiple sites.

We have therefore commenced a consultation process with a number of staff, with proposals to either reduce or cease activity at certain locations.

Consultation has commenced, with the proposal that Spicers will be focused on two key Regional Distribution Centres in Greenwich and Manchester. This will result in each of these key units carrying a greater depth of stock (currently planned at a 40% increase in Greenwich and over 100% increase in Manchester over today’s levels), thereby increasing availability levels. In addition these two key sites will be enhanced by a number of local distribution centres.

Recent investments in additional racking for 1,000 pallets and a 30,000 sq foot mezzanine floor have already been completed in Greenwich and will be replicated in Manchester and additional Fedex lines introduced making it the centre of excellence for our Direct Delivery model.

It is the Board’s belief that should these proposals proceed, Spicers will become a more simplified, efficient and customer focused wholesaler enabling us to deliver on “right first time, every time”.

How does this affect a Spicers Dealer, if the proposals proceed?

80% of our dealers’ requirements are currently serviced from Greenwich and Manchester and that will not change. Those serviced from Bristol which is our smallest stocked RDC, despite an excellent team there, have experienced poor availability which will be enhanced by this change, with routes in the South West Region still being delivered in the same way by the same delivery team, but from a Cross Dock in the Bristol Area.

Scottish and North East Regions will now be picked in the Manchester RDC and for Scotland serviced from a new cross docking depot near Glasgow, and the North East will continue to be serviced from the existing cross dock based in Newcastle. Each RDC will become self-sufficient.

By giving Inventory the task of focussing on stock levels in two locations this will give clearer focus and will also mean that more stock is closer to the majority of our dealers. Both sites (Greenwich and Manchester RDC’s) will be connected daily by a feeder van to maximise availability. Additional investment of heads within the inventory department has also been made to focus on local availability, we know having the right stock in the right place at the right time is the core of our service to dealers.

These proposed changes will have minimum impact on our delivery services, but are intended to better support the Spicers customer through a fit for purpose, cost effective national operational and logistics platform.

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