ANNUAL REPORT 2014 BLOKKER HOLDING
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Operational excellence

USING SYNERGY, JOINING FORCES AND REDUCING COSTS
Omnichannel retail at the highest level is an increasingly challenging feat to pull off for modern retailers and the organisation behind the stores. This brings us to the next cornerstone of our strategy: operational excellence. Our group’s strength is the ability to join forces, which is why our retail formats are strengthening their cooperation behind the scenes. A good example of such efficient cooperation is our Shared Service Centers (SSC). Our Quality SSC, for example, monitors the quality and safety of our product ranges.

OCTOBER 2014: ESTABLISHMENT OF NEXTAIL  
The SSC Omnichannel Nextail, launched in October 2014, is the online organisation for all Blokker Holding retail formats. A large number of new employees and colleagues from the operating companies have since joined the Nextail team in Amsterdam. We have made major strides in omnichannel retail and our online revenue increased steadily to EUR 98 million in 2014. All our webshops are currently managed by Nextail.

CONSTRUCTIVE RELATIONSHIP WITH LESSORS
‘Operational excellence’ also means that, being the enterprising retailers we are, we close loss-making stores and open new branches whenever we spot an opportunity. An essential part of this is building constructive relationships with our lessors. The world has changed in the past five years and the percentage of vacant retail properties in the Netherlands increased for the seventh consecutive year in 2014. Whereas the vacancy rate remained below 6% up to 2010, this rate has since risen to nearly 9%. With 570 stores for every 100,000 inhabitants, the Netherlands has one of the highest levels of store density in Europe; this is part of the reason that 20% of new stores are not yet leased on completion. The situation in the home furnishings market also does not bode well: the 135 home furnishing centres in the Netherlands could easily serve a population of 51 million. Estimates have shown that there is room in the country for only 30 to 40 concentrations of home furnishing centres.

It is important that both lessors and lessees stay on top of these changes and continue to work together where possible. We ask that our lessors adopt a flexible attitude and show understanding for the changing situation in the market. Fortunately, our cooperation is improving in this respect.

MAKING CHOICES WITHIN THE PORTFOLIO
We believe that ‘Operational excellence’ also involves making choices – choices in our portfolio of retail formats which are consistent with our strategy, knowhow and aspirations. One of the decisions we made in 2014 was selling the Tuincentrum Overvecht chain of garden centres, as a result of which ‘Garden & Pets’ is no longer part of our core business.

CRUX IN RETAIL: BRINGING COSTS AND REVENUE IN LINE 
Another key aspect of Operational excellence is aligning revenue and costs with each other. This is both a challenge and a necessity, particularly for traditional retailers operating physical stores. In 2014, for example, we implemented carefully prepared measures for the reorganisation announced by Blokker Netherlands on 9 February 2015. 

Research conducted in 2014 focused on adapting the staffing at Blokker stores to the changing shopping habits and bringing personnel costs more in line with the lower sales revenues. This has resulted in a change in our staffing at half of our company-owned stores. This reorganisation coincided with Blokker’s announcement, on 9 February 2015, of a substantial investment in the rollout of the new format presented in e-commerce and logistics in 2014. 

E-FULFILMENT: DELIVERING ON THE PROMISE
Logistics and IT are key links in creating affordable and profitable product ranges and reliable delivery to our customers. Now and in the future, fulfilment will determine whether we will be able to deliver on our promises of fast and accurate delivery at the lowest costs. That is why we decided to invest in new distribution centres in 2014. A new distribution centre was completed for Xenos in Waalwijk in order to accommodate the growth of the chain’s online business and its expansion in Germany. Blokker implemented a new warehouse management system in 2014. 

 

 

 

In October 2014 online talents employed at our operating companies, along with new team members, moved into the offices of Nextail, the online organisation for our retail formats. 

The new Xenos distribution centre in Waalwijk was completed in 2014. Optimising our logistics operations is one of the priorities of our omnichannel strategy.