Metcash pays $46.5 million for full ownership of hardware chain Mitre 10, with supply chain overhaul to match
By Anna Game-Lopata | July 31, 2012
Metcash has paid $46.5 million
for full ownership of hardware chain Mitre 10.
The wholesale distributor for the independent retail market took just over two years to take possession of Mitre 10 after acquiring an initial 50 percent stake in 2009.
During this time, Metcash has undertaken a full supply chain overhaul of the business as part of an overall group initiative.
This includes the introduction of productivity improvements into all Mitre 10 distribution centres (DCs), the establishment of a national distribution centre for ‘slow movers’ (still in progress) and improving supply from China,
such as
reducing outside storage.
A total of 6,800 new stock keeping units (SKUs) have been introduced to Mitre 10’s range while 3,800 old ones have been removed.
“New and very positive supplier relationships have been developed along with continuous improvements introduced to Mitre 10’s catalogue program which is
driving sales growth,” says Metcash CEO Andrew Reitzer.
Mitre 10’s Derrimut warehouse in Victoria has introduced engineered standards and optimised its range, configuration and
and layout to promote pick efficiency.
Centralised storage for Mitre 10’s national product range is due October this year.
“Mitre 10 has proven to be a highly strategic and value adding business pillar for Metcash,” Reizer says. “The acquisition will provide an enhanced ability for Metcash to leverage its proven merchandising and brand management skills and world class logistics capability into the hardware sector.
“Mitre 10 is the last true independent hardware group,” he adds.
Mitre 10 reported a 4.5 percentage growth in sales to $833.2 million this year and a 2.4 percent increase in profit to $21.2 million.
Other Metcash Group supply chain
initiatives include phase 4 of a new DC being constructed in Huntingwood, NSW
expected to
go-live by the end of October.
It will offer a new system
to service convenience sector including the latest available ‘Goods-to-Person’ picking/putting technology to enable the most efficient combination of full-case and unit picks.
New software will be installed to guide the product putting, optimising unit and “singles” assembly.
Improved ergonomics for warehouse associates will be installed along with the automatic
induction of cartons
using a carton erector.