Toolstation distribution centre set to close

The Toolstation Distribution Centre in Drayton Fields, Daventry, could close in August

The UK's biggest builders' merchant said it planned to close a distribution centre due to trading challenges.

Travis Perkins, based in Northampton, said its Toolstation Distribution Centre in Daventry, could shut in August.

The planned closure was to "simplify the business in what continues to be a challenging trading environment," a spokesperson for the company said.

The news comes after the builders' merchant said until the next general election had taken place, the UK construction industry "is unlikely" to see any serious recovery.

The centre could close in five months

If closed, the centre's capacity would be absorbed by its sites in Redditch and Middleton which would allow the company to "react quickly to seasonal demand and increased volumes, while reducing costs and increasing efficiency", the Daventry Express reported.

Workers have been informed and Travis Perkins said it was doing everything it could to support them through redeployment or help them find alternative work.

Travis Perkins also said it would look at possibly exiting its French Toolstation business, which has 51 shops across the country and would review its options for Toolstation Benelux, which has 119 shops.

Overall, the company said that revenue had dipped 2.7% to £4.9 billion. Pre-tax profit went from £245 million to £70 million.

Travis Perkins employs about 20,000 people in the UK, France, Belgium and the Netherlands

A spokesperson said: "A recovery in the UK construction sector is unlikely to gather any momentum before the UK general election is concluded with the group's customers, large and small, inevitably waiting to see if there is a post-election government stimulus package for the sector and also seeking clarity on the future direction of interest rates."

Chief executive Nick Roberts said: “Ongoing economic challenges have significantly impacted our trading performance, driven by weakness in the new build housing and domestic RMI (repair, maintenance and improvements) sectors, and compounded by deflationary pressures on commodity products.

“Faced with these challenges, we have invested to protect and build our leading market positions.

“With market conditions expected to remain a headwind through 2024, the business is fully focused on improving profitability and enhancing cash generation.”