Aurora to outsource distribution and IT functions

The retailer, which at present operates a central services infrastructure, is poised to outsource its global distribution services and IT functions to third parties in February.

Aurora said that the decision was not about cost-saving but designed to give each of its chains more autonomy and performance accountability.

Aurora, which said that like-for-like sales rose by single digits over the five weeks to January 5, appointed managing directors of each chain last year.

As a result of the changes IT director John Bovill has decided to leave the business after a handover period.

Aurora is in consultation with employees affected by the changes but chief financial officer Richard Glanville said that there would “definitely not” be any job losses at the group.

Aurora, which has 1,586 stores in 48 countries, is in exclusive talks with global supply chain solutions group WT, part of Toll Group, to take over its worldwide distribution. WT will retain the existing management team and staff. 300 employees will transfer to WT, including director of distribution David Roberts who will become a director at WT.

Aurora will also outsource its IT functions to managed services company Retail Assist, to which 48 employees will transfer. The outsourcing of the would deliver economies of scale, cost synergies and best practice methods.

Glanville said: “The idea of our shared services was that each brand couldn’t manage its own IT and distribution. We don’t think our brands are subscale anymore and they can manage their own relationships with thid parties and decide whether they can afford [services].”

He said that the changes would “make it easier in the future” if the group decided to divest any chains but that Aurora was “not in any process” nor had “any intention to do it”.

Aurora chief executive Mike Shearwood said: “This new structure is very much about growth. It builds on the positive results for the first half announced in November and the anticipated strong outcome for the year as a whole, following an improved performance in the second half, including positive like for like sales over the Christmas trading period.”