Myer secures lease on new Victorian distribution centre

Department store icon Myer (ASX: MYR) has today announced a 10-year lease on a new, 40,000-square-metre facility in Melbourne's west, set to become the group's next national distribution centre (NDC).

Located at Dexus' Horizon 3023 estate in Ravenhall, the new NDC is tipped to hold over 100,000 stock keeping units (SKUs) and is expected to shoulder 70 per cent of fulfilment for online and in-store operations.

A company release said the facility would incorporate several automation solutions, indicating stock would be prioritised for stores with the highest sell-through.

Construction is already underway at the site, and Myer is expected to begin using the NDC in a phased approach from August 2022.

The news comes as part of sweeping changes to Myer's supply chain, which have seen international freight shipping and online operations streamlined under its factory to customer initiative.

In parallel, the company is also gearing up for an attempted board spill that is expected to come from substantial shareholder, Solomon Lew's Premier Investments (ASX: PMV).

Group CEO John King said the Ravenhall deal was another important step in the group's customer first strategy.

"It will deliver an enhanced experience in store and online for our customers but also significant efficiencies for the business through significant benefits from factory to customer," King said.

"Having a centralised fulfilment centre for stores replaces our historical push model, and will result in improved inventory management, reduced markdowns and maximised sell-through whilst also producing significant efficiencies in our online fulfilment operations," he added.

Over the course of the past year, this strategy has led the group to cut down on floor space, inventory, and several brick-and-mortars outlets as well as a refocus towards its "Only at Myer" products.