£400m Reality of a 3PL launch for GUS
Great Universal Stores has set up a third-party business to offer web design, call centre services and fulfilment to retail-ers, manufacturers and e-busi-ness start-ups.
The home shopping group launched the £400m business, called Reality, last week as the first stage in a restructuring of the group, which includes Argos, parcels business White Arrow and information com-pany Experian.
All the group’s home shop-ping logistics infrastructure will be in Reality when it for-mally launches on 1 July.
Reality will have 9,000 full-time equivalent logistics staff already involved in the ship-ment of more than 100 million parcels a year through four automated sorting centres.
Also included are 38 parcels depots, 1,800 drivers and 4,000
self-employed couriers. Forty per cent of volumes are already third-party work for companies such as Reader’s Digest, Wine Club and satellite tv shopping channel QVC.
‘In two years’ time we would expect to at least double the size of outside business,” said Reality logistics director Bill Howie.
The company is already thought to be close to announc-ing two new contracts worth £80m over five years.
One is expected to be with bra manufacturer Playtex and the other with a financial serv-ices provider.
Business-to-business cus-tomers already include Office World.
Reality will be targeting retailers, big brand manufac-turers and e-commerce start-ups, but the company is making it clear that it is not concentrating purely on the
business-to-consumer market.
Predicting strong growth from the services Reality is offering, Howie confirmed that expansion of the logistics net-work will be necessary
“We have a certain amount of capacity we can expand, but that capacity will not support the growth we want to push through the business. At some stage we will have to invest,” he said.
Initially, this investment will be in people and processes, but capital investment will follow within two years, predicted Howie.
The company is also expect-ing to make acquisitions or enter into joint ventures and partnerships to give it logistics capability and the capacity to expand.
“We can offer big contract dis-tribution companies the facili-ties for offering home shopping to their existing clients, because they are not geared up to do it,” said Howie.
“We would consider any kind of relationship with them where there would be a mutual benefit.”
