Clipper Logistics plc has been appointed by leading German fashion brand s.Oliver, to manage its European wholesale and retail returns management service. This represents the Company’s first Boomerang contract in mainland Europe.
The contract win represents a major advance for Clipper’s European operations, based in Germany. s.Oliver is a family-owned fashion company located in Rottendorf, Bavaria and operates retail outlets throughout Austria, Croatia, Switzerland and the Netherlands as well as across Germany. The Boomerang returns management service will be delivered from Clipper’s existing solutions centres in Munchberg and Hof.
As a condition of the contract, s.Oliver sought to dispose of the freehold of the Munchberg site to Clipper. Clipper operates an asset-light business model and does not currently own any of the sites that it provides its services from, therefore the Munchberg site has been acquired by Knaresborough Real Estate Limited, a related party to Clipper through its ownership by Executive Chairman Steve Parkin, and will continue to be leased to Clipper on the same terms and monthly rent as previously in place with s.Oliver, being €37,500 per month, for a term of ten years. This lease arrangement will allow Clipper to retain its asset-light business model, and falls within LR 11.1.10R (smaller related party transactions).
Returns management is an increasingly important arena for retailers. In the UK, estimates are that between 25% and 40% of all clothing and footwear purchases are returned.
Historically, customers would return the product to the store where the purchase was made, but as online retail has developed, customers are demanding choices in their method of return. This represents a stock management and processing challenge for the retailers. The Group has a strong track record of managing this process for customers, including managing the returns operation for ASOS, the UK’s leading online fashion retailer.
The s.Oliver contract expands on a long term and successful partnership, dating back to 1998. Clipper’s existing solution for the s.Oliver brand has seen it manage warehousing, pre-retail processing and “direct to store” distribution of fashion items.
The bespoke returns solution will assist s.Oliver in developing sales growth, increasing efficiency of stockholding and improving its customer service. Returned products will be received from s.Oliver stores and concessions and processed effectively to maximise resale value.
Boomerang has already been a proven success with UK retailers, with approximately 95% of product successfully returned to prime stock at first pass.
Tony Mannix, Chief Executive Officer of Clipper commented:
“The manner in which this contract has been proactively implemented demonstrates the dynamic relationship between Clipper and s.Oliver. We’re constantly looking at ways to improve the systems and processes available to our customers, and implementing a best-in-class returns management system was the natural progression for this contract. In implementing the Boomerang solution, we will reorganise parts of the current process, including the way clothing is delivered, stored and hung. This will increase supply chain efficiency and improve customer service”.
Steve Parkin, Executive Chairman of Clipper commented:
“We set out earlier this year a very clear strategy to develop returns management capabilities in continental Europe to capitalise on our strengths in this key area. Returns management is a growing issue for all retailers and finding ways to make the process more efficient is increasingly crucial to their success. Providing our Boomerang solution to a major retailer such as s.Oliver validates this strategy, and we look forward to continuing to grow the Boomerang brand both in the UK and overseas.”