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Aurora to outsource distribution and IT functions

Aurora Fashions, the fashion group which comprises womenswear chains Oasis, Coast, Karen Millen and Warehouse, is to outsource its distribution and IT functions.

The group, which currently operates a central services infrastructure, is set 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 aimed to give each chain more autonomy and accountability for their individual business’ performance.

The retailer, 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 told Drapers 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 the Toll Group, to take over its global distribution. WT will keep the existing management team and staff, with 300 employees set to 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, with 48 employees set to transfer to the company. The outsourcing of the IT functions would deliver economies of scale, cost synergies and best practice solutions for customers, Aurora said.

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 added that the changes would “make it easier in the future” if the group decided to divest any of the chains but added that Aurora was “not in any process” or had “any intention to do it”.

Chief executive Mike Shearwood added: “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.”

 

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