MARKS and Spencer has announced it is pulling out of a £200million deal to build a distribution warehouse at the London Gateway logistics park.
The high street giant made its decision 11 months after calling on Prime Minister David Cameron to help make the announcement at the port, promising to create 700 jobs by building a 900,000 square foot warehouse.
Bosses at the £1.5billion superport development in Stanford-le-Hope remain bullish about the future of the logistics park though and claimed there is interest from big businesses like Arcadia, who own high street clothing brands Topman, Burton and Topshop.
The change of heart by M&S came on Tuesday - the same day it announced a third consecutive year of declining profits - and the firm will now look at using two smaller distribution centres, one in Castle Donington that opened last year, Leicestershire and another in Bradford, in a bid to save £130million.
A spokesman said: “Our strategy hasn’t changed and we remain on track to deliver a new, national network of clothing and home distribution centres by 2016/17.
“We can deliver this in a more capital efficient way without a third, large automated distribution centre and therefore we are not proceeding with the acquisition of the London Gateway site. We continue to ship goods through the London Gateway port and won’t completely rule out a presence there in the future.”
A spokesman for London Gateway said: “We continue to be a port of choice for M&S and we will keep moving forward with them to support their business development objectives and reduce their supply costs.
“We have recently announced five new shipping line services to the world and a major new deal on the Logistics Park with Prologis, the world’s largest developer of industrial real estate, in addition we are already starting to build the new Common User Facility on the Logistics Park.”
DP World announced on Tuesday that it has reached a deal with Buckingham Group to build a warehouse on the sprawling, nine million square foot logistics park.
David Cameron helped make the announcement last June
The multi-purpose cargo handling centre - which will be 375,000 square foot, the size of five football pitches - will be built in two phases and should be completed in early 2015.
Simon Moore, the CEO for London Gateway said: “Discussions with leading retailers confirm that many have a substantial proportion of their UK store footprint within 50 miles of London Gateway where the combination of population density, high disposable income and consumer spend drives a significant percentage of UK sales.
“The potential supply chain cost savings in terms of primary and secondary distribution for occupiers of the London Gateway Logistics Park are compelling.”
How London Gateway's own distribution centre will look
STEPHEN Metcalfe, the Tory MP for South Basildon and East Thurrock said that M&S pulling out of the deal to build a warehousing complex at the new port was down to the retailer’s poor performance.
News that the firm would not be locating a new centre at the London Gateway logistics park came on the same day it announced its profits had fallen for the third year in a row.
Mr Metcalfe said: “I think it’s more a reflection of the poor performance of M&S than being a reflection on London Gateway.
“London Gateway is still the best located port in the UK and i’m confident they will find a new tenant for that site in the near future.”
BUSINESSES are still backing the London Gateway Logistics Park - despite the setback to its development.
Two weeks ago, DP World - who run and own the port and logistics park - announced that warehouse firm Prologis will create 300 jobs by building a distribution centre on the park.
Yesterday, London Gateway announced it is to begin building its own warehouse centre at the logistics park.
And just last week, port bosses announced that momentum was beginning to gather with the port, which opened last November, now servicing six ships a week - an increase of five in just two weeks.
Roger Williams, CEO of UK Warehousing Association, which represents 650 member companies, said: “London Gateway is spectacularly well-located. I have no doubt London Gateway will have a major role to play in shaping future supply chain planning, delivering cost savings and efficiencies to benefit logistics providers and their customers.”
Martin Jones, Head of Global Logistics for fashion retail giant Arcadia, said: “The offering at London Gateway is certainly of interest.”
Taking shape - the port and logistics park shot from above recently