Edinburgh-based logistics group John Menzies has begun working on its largest ever retail contract, with newsagent WH Smith.
Under the three-year deal, understood to be worth several million pounds, Menzies’ distribution arm will operate from three WH Smith depots in Birmingham, Dunstable and Swindon, as well as delivering to the retailer’s network of more than 1,200 stores across the UK.
This is a very significant milestone in our journeyPaul McCourt
The nationwide contract, previously held by long-standing WH Smith partner Wincanton, builds on Menzies’ existing relationship with the chain, which has seen it provide retail logistics in Scotland and the north of England over the past 18 months.
David McKinlay, supply chain director for WH Smith, said: “Our experience of working with Menzies Distribution to date has been excellent and we had a strong desire to extend this quality of service and flexible approach to the rest of the UK, which was a major factor in choosing Menzies.
“We have been very pleased with the transition of the business across to Menzies and we look forward to working in close partnership to make further supply chain improvements together using their strong depot infrastructure and experience.”
The deal has prompted Menzies Distribution, which employs some 3,500 people, to add a further 80 vehicles to its fleet, bringing its total number of owned lorries and trailers to 950. The firm has also taken on 72 drivers from Wincanton.
Managing director Paul McCourt said: “This is a very significant milestone in our journey to establish Menzies Distribution as a serious player in the UK’s retail logistics market.
“As a business that three years ago was largely about delivering newspapers and magazines, we are delighted now to be delivering national retail logistics for one of Britain’s biggest and best-known high street retailers. Having secured several significant contracts in the e-commerce fulfilment sector and completed three recent acquisitions, we are building a strong and sustainable business that is ideally placed to take advantage of further growth within this dynamic market.”
The past two years have seen Menzies Distribution snap up AJG Parcels of Inverness, Oban Express and Thistle Couriers in Aberdeen as it seeks to capitalise on the growing market for online retail deliveries.
The WH Smith contract comes after Menzies said in October that it had appointed financial adviser Rothschild & Co to examine the prospect of splitting its aviation and distribution arms, following calls from activist investors for a break-up.
German investor group Shareholder Value Management has “strongly” urged the group to separate the two divisions, saying such a move would be “immediately and significantly value accretive, and in the interest of all shareholders”.