DHL Supply Chain, the world’s leading logistics services provider, has signed a new contract worth £113.2 million (€123.3 million) with UK-based Debenhams department store, extending its 12-year partnership until 2012. The three-year agreement sees DHL’s specialist fashion unit continue to develop and provide all Debenhams’ warehouse and distribution services to 157 stores across UK and Ireland. DHL handles 120 million units annually which spans Debenhams’ diverse range of products across several market segments including fashion, beauty, homeware, linen and jewelry.

DHL operates all three of Debenhams’ UK distribution centers, providing transport and warehouse services; including supplier collections, store deliveries, out base and cross dock operations. Debenhams, working with DHL, has undergone a two-year cost cutting programme delivered through internal process reviews, operational developments and streamlining including advancements in the warehouse picking operations that have provided business growth benefits including cutting the cost per unit by more than 10 per cent since 2006/2007, according to DHL.

“One of the other key changes in recent years has been the evolution of an advanced warehouse solution that now better allows DHL to focus its resources on moving Debenhams high priority product lines more swiftly through the supply chain,” said Debenhams’ head of logistics, Paul Leggett. “This in turn has helped us become more agile with our promotional activity and supported the large transition to more own-bought product that occurred this year.”

DHL has also taken over the operation of three off-site stock rooms, allowing DHL to develop new services, demonstrating its effectiveness and added value in elements of the supply chain that are normally not considered part of traditional retail logistics.