Marks & Spencer PLC (LON:MKS) is to open a new distribution centre for its struggling home and clothing division in a bid to cut costs.
The 495,000 square feet logistics centre will be based at a former Tesco PLC (LON:TSCO) site in Hertfordshire, southern England, and will open in 2019.
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It will help M&S simplify its distribution network, allowing clothing to be sent directly to warehouses and then straight to stores.
Under the current structure, M&S moves clothing more than once before it reaches its stores.
The centre will employ more than 500 people and by operated by a third-party logistics supplier, serving 150 M&S stores.
M&S said it would halt operations at its Neasden distribution centre in London, though insisted it was not directly related to opening the new site in Hertfordshire.
The bid to reduce distribution costs is part of a revised strategy, which new M&S chairman Archie Norman outlined in November.
The plan involves shutting more than 80 stores at home and abroad at a cost of up to £500mln and follows sluggish clothing sales and a slowdown in food sales growth.
In a trading update last week, M&S said a squeezed consumer led to a decline in food sales and warm weather in October hurt clothing sales in Christmas trading.
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The retailer reported a 1.4% drop in total UK like-for-like sales to £2.8bn in the 13 weeks to December 30.