Lululemon is going to close its distribution center in Washington and let go of 128 workers. This decision comes after they opened a big new warehouse near Los Angeles. They confirmed this news on Friday.
The athletic clothing company filed a notice with the state’s Employment Security Department on Thursday. They said they will close the distribution center in Sumner, which is about 35 miles south of Seattle. The layoffs will start on June 21, and the center is expected to shut down by the end of the year.
A spokesperson from Lululemon explained that they’re looking at how they deliver their products and how they can support their business in the future.
They said they chose to close the Sumner Center after looking at their current setup and their plans for the future. Some employees will move to other centers, including the new one near Los Angeles. But about 100 positions will be cut.
The facility in Sumner has a lease until July 2025, according to company records. Lululemon opened this warehouse in 2010, and it was one of its first big distribution centers in the U.S. after it became a public company in 2007.
This closure comes after Lululemon expanded its warehouse space a lot in the past few years to handle its fast growth. By January of this year, they had 4 million square feet of distribution centers in Canada and the U.S.
Most of this growth comes from two new warehouses near Los Angeles and Toronto. In 2021, they leased a big warehouse near Los Angeles, and in 2022, they leased another one near Toronto.
The spokesperson said the new California warehouse is already open. The one in Canada should be running by 2026.
Lululemon has been a big name in athletic wear for the past ten years, growing from $1.6 billion in sales in 2013 to $9.6 billion in 2023. But lately, their growth in North America, where they make the most sales, has slowed down.
In March, they reported good earnings for the holidays, but they weren’t happy with their sales in the U.S. Sales in the Americas only grew 9% in the last three months, compared to 29% in the same period last year.
