Lululemon, the popular athletic apparel retailer, has announced its plans to close its distribution center in Sumner, Washington, resulting in the layoff of 128 employees. The company filed a WARN notice with the state’s Employment Security Department, confirming its decision to shut down the facility located south of Seattle. The layoffs will commence on June 21, with the facility expected to be completely closed by the end of the year. This move comes after Lululemon opened a new, larger warehouse outside of Los Angeles.
According to a spokesperson from Lululemon, the decision to close the Sumner distribution center was part of the company’s growth strategy to meet the needs of its customers. The company conducted a review of its current infrastructure and fulfillment strategy, which led to the conclusion that closing the smaller distribution center in Sumner, WA, would result in overall optimization. While some employees will have the opportunity to relocate to other facilities, there will still be a reduction of over 100 positions at the Sumner distribution center.
Expansion and Growth
Lululemon has significantly expanded its warehouse footprint in recent years to facilitate its rapid growth. The company initially began operating a warehouse in Sumner in 2010 and has since tripled its warehouse space to accommodate its increasing business. As of January 31, 2021, Lululemon leased and owned 1.12 million square feet of distribution centers in Canada and the U.S. By the end of January 2022, this footprint had expanded to nearly 4 million square feet, with the addition of new facilities outside of Los Angeles and Toronto.
Despite its success in the athletic apparel market, Lululemon has encountered challenges in maintaining its growth in North America, its largest sales region. The company’s recent financial reports have shown slower sales growth in the U.S., prompting the need for strategic decisions such as closing the Washington distribution center. While Lululemon has experienced substantial sales growth over the past decade, recent trends indicate a need for adaptation and optimization in its operations.
Lululemon’s decision to close its Washington distribution center and lay off 128 employees reflects the company’s commitment to evolving its distribution network to support its business’s future vision. By consolidating operations and focusing on expanding key facilities outside of Los Angeles and Toronto, Lululemon aims to streamline its processes and accommodate its growth trajectory. Despite the challenges faced in the North American market, Lululemon remains a dominant player in the athletic apparel industry and continues to strive for innovation and excellence in its offerings.
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