Under Armour will build a mega-sized distribution center for online orders
August 31, 2016 03:13 PM
Athletic apparel manufacturer Under Armour Inc. will flex its e-commerce muscles by building a 1.3 million square-foot distribution center for online orders.
The consumer brand manufacturer, which announced the project yesterday, will build the distribution center from the ground up on the site of a former Bethlehem Steel plant in Baltimore County, Md., and expects to complete it in summer 2018.
At 1.3 million square feet, the Under Amour distribution center will be equal in size to the largest e-commerce distribution center currently operated by an Internet Retailer Top 500-ranked e-retailer, according to Top500Guide.com data. The Home Depot Inc., No. 7 in the Top 500, operates five e-commerce distribution centers that are an average of 1.3 million square feet. By comparison, most of the large-scale, robot-assisted distribution centers that top-ranked Amazon.com Inc.is building using its “eighth generation” warehouse design are about 1 million square feet. The average size of e-commerce fulfillment centers operated by Top 500-ranked e-retailers is about 266,000 square feet.
"The new distribution house will be a top-notch service engine for our e-commerce business to deliver the right product, to the right place at the right time to our growing consumer base and athletes around the world," says Kevin Plank, the founder and CEO of Under Armour. Under Armour is the No. 100 web merchant in the Top 500 Guide.
The facility will employ about 1,000 workers, and Under Armour will be eligible for state and local grants and tax breaks. Under Armour is based in Baltimore and operates another distribution center nearby. It operates other distribution facilities in Mount Juliet, Tenn., and Rialto, Calif.
FedEx Corp. also operates a ground shipping facility in the industrial park where Under Armour will build its new distribution center. FedEx is Under Armour’s primary shipping carrier for online orders.
The company last month reported direct-to-consumer revenue grew 28% in the second quarter to $321 million from $251 million. Direct-to-consumer revenue includes sales generated online and through Under Armour’s brand and factory stores. It operated 212 stores globally as of June 30, up from 160 a year earlier. It does not break out an e-commerce figure, but Internet Retailer estimates Under Armour generated $377.5 million in online sales last year, up 30% from $290.4 million in 2014.
Under Armour also recently announced it is taking over one of the premiere retail store locations in the United States—the 53,000-square-foot former FAO Schwartz toy store site on Fifth Avenue at the southeast corner of New York’s Central Park. Plank says Under Armour plans to “build the most breathtaking and exciting consumer experience ever conceived at retail” at the store. FAO Schwartz vacated the store in 2015, citing rising rent.