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Dive Brief:
- Kohl’s will permanently shutter an e-commerce fulfillment center in Monroe, Ohio, effective Oct. 31, the company announced earlier this month.
- The discount retailer will lay off 768 employees as part of the closure, per a Worker Adjustment and Retraining Notification Act notice filed June 5. Most workers’ last day of employment will be Sept. 12.
- The company said it is closing the Ohio facility due to improved efficiency at newer centers, which has allowed it to expand customer fulfillment from stores.
Dive Insight:
Kohl’s is reducing the size of its supply chain footprint amid a turbulent time for the discount retailer.
The Ohio e-commerce fulfillment center was one of 14 such facilities in the retailer’s network and had been in operation since 2001, per a company press release.
“This was a difficult decision, and one we did not take lightly,” said interim CEO Michael J. Bender. “Ultimately, it’s a necessary step to strengthen our operational discipline, drive greater cost efficiency, and ensure the long-term health of our business — for our customers, our associates, and the future of our company.”
The company previously announced plans to also close a California e-commerce fulfillment center after its lease expired in May. The facility was first opened in 2010.
Meanwhile, Kohl’s is contending with the crunch of heightened tariffs on imported goods, which have hit discount retailers harder than expected. In response, Kohl’s has adjusted its inventory strategy to focus on high-demand products while focusing on sourcing diversification and supplier collaboration.
Beyond a rebalancing of its supply chain, Kohl’s is also undergoing major changes elsewhere within the company.
Bender took over as interim chief executive in May after predecessor Ashley Buchanan was fired just a few months into his tenure due to conflicts of interest. Buchanan’s departure followed shakeups at the executive level as well as a 10% reduction of the company’s corporate workforce in January.
However, the multi-pronged turbulence does not mean the company is abandoning supply chain investments altogether.
On a May 29 earnings call, CFO Jill Timm said Kohl’s plans to spend between $400 million to $425 million in capital expenditures this year, with some of those funds allocated toward an expansion of its e-commerce fulfillment center in Indiana.
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