Marks & Spencer has acquired its key logistics services provider Gist for £145 million to take control of its food supply chain.
Gist is the principal contract logistics provider to M&S Food, from Storeshield Limited, a subsidiary of The BOC Group Limited.
The acquisition is expected to be EPS accretive in the next year and accelerates M&S’s multi-year plan to modernise its Food supply chain network to support growth.
M&S Food has entered new channels through the investment in Ocado Retail and through franchise partnerships, including over 2,500 Costa stores.
However, M&S said there is a substantial opportunity to create a more efficient and effective supply chain through investment in the network to reduce the cost to serve, update legacy systems and improve automation.
Gist provides the majority of M&S Food logistics services via a network of eight primary and 10 secondary distribution centres located across the UK and the Republic of Ireland, including a number of freehold warehouses.
As previously highlighted the existing arrangement has a higher cost legacy contract which expires in 2027. The acquisition will generate immediate benefits to M&S through the elimination of contractual fees and costs and the implementation of aligned operational processes.
Through acquiring Gist, M&S can also take control of and invest in the network, building on the successful implementation of the “Vangarde” supply chain optimisation programme.
“M&S has been tied to a higher cost legacy contract, limiting both our incentive to invest and our growth,” M&S chief executive, Stuart Machin said.
“The last two years have shown what can be achieved by working collaboratively alongside our partners at Gist. This has given me confidence that now is the time to take action and remove an impediment to our growth.
“We have therefore acted decisively to acquire Gist, taking control of our Food supply chain for the first time in our history. This is the first step in a multi-year plan which will transform the entire supply chain.”