Hachette to close LBS and build new 'world class' distribution centre

Hachette to close LBS and build new 'world class' distribution centre

Hachette is consolidating its distribution operations and building a new "world-class" centre in Didcot, Oxfordshire, resulting in the closure of its Littlehampton warehouse and office in 2019. 

All 230 jobs at Littlehampton Book Services (LBS) in Worthing are at risk of redundancy, the publisher said, along with "a handful" of jobs, of "10 or less" at Vista IT at its Bookpoint distribution centre, located close to the new site.

Hachette plans to build a "world class" distribution centre in Didcot following the closure of LBS, which The Bookseller understands will cost tens of millions of pounds. The investment will involve overhauling all of its IT systems and operating processes and replacing Hachette’s Vista warehouse management and sales order processing systems with "modern, market-leading software solutions" from suppliers SAP and JDA. 

Updating the technology at each warehouse was an option at the beginning of the process, according to Hachette c.o.o Chris Emerson, but it was decided there was “no way” either of the two sites could accommodate the types of “very advanced" equipment involved when considering aspects of size, space and layout. Building the new warehouse on a new site was also preferable to avoid service disruption, as well as being "more cost effective". 

Emerson told The Bookseller the project is not a cost-cutting measure, but a “once in a lifetime” project which will use equipment that only a few warehouses have in the UK. 

The move anticipates "progressive" trends which have arisen following the rise in e-book sales, such as increased costs to publishers shipping in smaller quantities. However, Emerson said "that's part of the equation, not the main reason" for the new distribution centre.

The new warehouse is also designed to grow Hachette’s share of the client publisher market, by enabling Hachette to deliver "significant improvements” that would “really take it to the next level”. Hachette currently has 30 publisher clients. The new warehouse will offer greater levels of capacity and flexibility, and allow it to be faster and more reactive. Moreover, it will be "one of the most technically advanced in the UK", including “sophisticated" automation of processes. This will be good news for the Didcot area, Emerson said, where it is also likely to create jobs. 

"We think there's a long and good future in the physical book distribution industry and therefore we think it's worth making an investment. It's our intention to grow that business and grow our market share," said Emerson. "We're investing in the most high tech solution we could possibly be investing in. We're responding to those pressures in the market but our aim is absolutely to grow this business for Hachette to support Hachette's growth and our publishers," he said.

A period of consultation with affected staff begins today (13th July) and will be Hachette’s “priority" over the next few months, the publisher said. The intention was to give colleagues at LBS "as much notice as possible” in order to consult with them "thoroughly and openly a long time in advance" of closure.

The decision to build in Didcot was about finding a good location and "absolutely no reflection on the capabilities of LBS staff, who provide an outstanding service to their publishers and customers,” Emerson added.

"We are committed to minimising the personal impact of these changes on our affected colleagues to the very best of our ability," he said.

The timescale for the project stretches over the next three years. Building work on the new distribution centre will start towards the end of 2016 for completion in the second half of 2017 and Hachette Distribution and its client publishers will go through a "carefully phased transition" to the new site in 2018 and 2019. By the end of 2019, LBS will close while the existing Bookpoint warehouse will be retained for bulk storage.

In December, Penguin Random House proposed to close its distribution centre in Rugby, putting 255 employees at risk of redundancy.