Home Business Lululemon to close Washington warehouse, lay off 128 employees

Lululemon to close Washington warehouse, lay off 128 employees

by SuperiorInvest

lululemon plans to close its Washington distribution center and lay off 128 employees after opening a massive new warehouse outside Los Angeles, the company confirmed Friday.

The sportswear retailer filed a WARNING notice with the state Department of Employment Security on Thursday, notifying it of its plans to close its distribution center in Sumner, located about 35 miles south of Seattle, and eliminate 128 jobs. . The layoffs will begin June 21, according to the WARN notice. The facility is expected to close by the end of the year, according to a Lululemon spokesperson.

“As we continue to deliver on our growth strategy to meet the needs of our guests, we periodically evaluate our distribution network to help shape and support the future vision of our business. Following a review of our current infrastructure and evolution of our fulfillment strategy, which includes a multi-year investment to increase overall capacity and support our growth, we have made the decision to close one of our smaller distribution centers, located in Sumner, WA,” the spokesperson said.

“While some employees will be retained and moved to other facilities, including our recently opened distribution center in the greater Los Angeles area, the optimization will result in the reduction of just over 100 positions within the existing Sumner distribution center “added the person. . “We are committed to supporting our affected employees during this transition.”

The 150,000-square-foot facility has a lease that expires in July 2025, according to company securities filings.

Lululemon began operating a warehouse in Sumner in 2010, and it appears to be the first major distribution center the company opened in the U.S. after going public in 2007, according to regulatory filings.

The closure comes after Lululemon more than tripled its warehouse space in recent years to accommodate its rapid growth.

As of Jan. 31, 2021, Lululemon leased and owned 1.12 million square feet of distribution centers in Canada and the U.S., filings show. By the end of January, that footprint grew to nearly 4 million square feet.

Most of the growth comes from two new facilities Lululemon leased outside of Los Angeles and Toronto.

In 2021, it entered into a new lease for a 1.26 million-square-foot facility outside Los Angeles in Ontario, California, filings show. In 2022, he leased a 980,000-square-foot warehouse outside Toronto in Brampton, Ontario.

The Lululemon spokesperson said the California facility recently opened. The new Canadian facility is expected to be operational in fiscal 2026, company filings show. The retailer previously expected the facility to be operational in fiscal 2024, according to filings.

Lululemon has spent the last decade dominating the sportswear space and becoming one of the most popular brands among teens. It has increased annual sales from $1.6 billion in fiscal 2013 to $9.6 billion in fiscal 2023.

But recently, its growth in North America, its largest region by sales, has begun to stall.

In March, it reported holiday results that beat Wall Street expectations, but issued disappointing forecasts after seeing weak U.S. sales.

In the three months ending January 28, sales grew 9% in the Americas, compared with 29% growth in the same period a year earlier.

— Additional reports from CNBC's Annie Palmer.

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