Lululemon plans to shut its Washington distribution center and lay off 128 workers after it opens an enormous latest warehouse outside Los Angeles, the corporate confirmed Friday.
The sportswear retailer filed a WARN notice with the state Department of Employment Security on Thursday, informing it of plans to shut its distribution center in Sumner, positioned about 55 miles south of Seattle, and cut 128 jobs. The layoffs will begin on June 21, the WARN notice said. The facility is anticipated to shut by the tip of the yr, based on a Lululemon spokesman.
“As we continue to execute on our growth strategy to meet the needs of our guests, we regularly evaluate our distribution network to help shape and support the future vision of our business. “After reviewing our current infrastructure and evolving our fulfillment strategy, which includes a multi-year investment to increase overall efficiency and support our growth, we have made the decision to close one of our smaller distribution centers – located in Sumner, Washington,” the spokesperson said.
“While some employees will be retained and reassigned to other facilities, including our recently opened distribution center in greater Los Angeles, the optimization will result in a reduction of just over 100 positions at the existing Sumner distribution center,” the person added. . “We want to support our employees who are affected by this change.”
The 150,000-square-foot facility has a lease expiring in July 2025, based on the corporate’s securities filings.
Lululemon first opened a warehouse in Sumner in 2010, and it appears to be the primary major distribution center the corporate opened within the U.S. after going public in 2007, based on securities filings.
The closure comes after Lululemon greater than tripled its warehouse space over the past few years to accommodate rapid growth.
The documents show that as of January 31, 2021, Lululemon leased and owned 1.12 million square feet of distribution centers in Canada and the US. By the tip of January, that had grown to just about 4 million square feet.
The biggest increase comes from two latest facilities leased by Lululemon outside of Los Angeles and Toronto.
Documents show it entered right into a latest lease in 2021 for a 1.26 million-square-foot facility outside Los Angeles, Ontario, California. In 2022, it leased a 980,000-square-foot warehouse outside Toronto in Brampton, Ontario.
A Lululemon spokesman said the California plant recently opened. Company documents show the brand new Canadian facility is anticipated to be operational in fiscal yr 2026. The seller previously expected the ability to be operational in fiscal yr 2024, the documents show.
Lululemon has spent the last decade dominating the sportswear market and becoming some of the popular brands amongst teenagers. It increased annual sales from $1.6 billion in fiscal 2013 to $9.6 billion in fiscal 2023.
Recently, nevertheless, the corporate’s growth in North America – its largest region by sales – has begun to stagnate.
In March, it said holiday profits topped Wall Street expectations, but issued disappointing forecasts after sluggish U.S. sales
In the three months ended Jan. 28, sales within the Americas increased 9%, in comparison with growth of 29% within the year-ago period.
— Additional reports by CNBC’s Annie Palmer.
Credit : www.cnbc.com
