Lululemon, a popular athletic apparel retailer, has recently announced its decision to close its distribution center in Sumner, Washington, laying off 128 employees in the process. This move comes after the company opened a new, larger warehouse outside of Los Angeles. The decision to shut down the Sumner facility was made as part of the company’s growth strategy to meet the evolving needs of its customers and support its future vision.
According to a spokesperson for Lululemon, the closure of the Sumner distribution center was a result of the company’s review of its current infrastructure and fulfillment strategy. The decision was made to optimize its distribution network and increase overall capacity to support its rapid growth. While some employees will have the opportunity to relocate to other facilities, the closure will result in the reduction of over 100 positions within the Sumner facility. The company remains committed to supporting the impacted employees through this transition.
Lululemon first started operating a warehouse in Sumner in 2010, marking it as the company’s first major distribution center in the U.S. following its initial public offering in 2007. Over the years, Lululemon expanded its warehouse footprint significantly to accommodate its growth. As of January 31, 2021, the company leased and owned over 1.12 million square feet of distribution centers across Canada and the U.S. By the end of January 2022, this footprint grew to nearly 4 million square feet, with new facilities outside of Los Angeles and Toronto contributing to the expansion.
The closure of the Sumner distribution center is a reflection of Lululemon’s evolving business strategy, which focuses on increasing capacity and streamlining operations to support its growth trajectory. The company has been investing in new facilities, including a 1.26 million square-foot warehouse outside of Los Angeles and a 980,000 square-foot warehouse in Toronto. While the California facility has recently opened, the Canadian facility is expected to be operational by fiscal 2026, slightly later than initially planned.
Lululemon has been a dominant player in the athletic apparel industry, experiencing significant growth over the past decade. The company’s annual sales have grown from $1.6 billion in fiscal 2013 to $9.6 billion in fiscal 2023. However, recent performance in its largest market, North America, has shown signs of stagnation. Despite reporting strong earnings in the holiday season, the company issued disappointing guidance due to slow sales in the U.S. Sales in the Americas grew by 9% in the three months ending January 28, compared to 29% growth in the same period last year.
The closure of Lululemon’s distribution center in Sumner, Washington, reflects the company’s strategic shift towards optimizing its operations and increasing capacity to support its continued growth. While this decision may result in job losses for some employees, Lululemon remains committed to supporting them through the transition. The company’s expansion into new facilities outside of Los Angeles and Toronto underscores its commitment to meeting the evolving needs of its customers and driving future growth.