Lululemon to shutter Washington distribution centre, lay off 128 employees

The Lululemon logo is seen on a wall at the company's headquarters, in Vancouver, on Thursday, May 25, 2023. (Darryl Dyck / The Canadian Press)

Lululemon Athletica will close its distribution centre in the state of Washington at the end of the year and lay off more than 100 employees, the apparel retailer told Reuters on Friday.

The Vancouver-based firm will shutter the Sumner distribution centre as part of its business optimization effort and cut 128 jobs beginning June 21, according to a WARN notice filed with the state's Employment Security Department.

The move comes at a time when Lululemon is seeing slowing demand for its premium athleisure in North America, where excessive inventory levels at sporting retailers has resulted in lower orders for sportswear and apparel firms.

"We regularly evaluate our distribution network to help shape and support the future vision of our business," a company spokesperson told Reuters.

The lease for Lululemon's 150,000-square-foot Sumner distribution centre will end in July 2025, a regulatory filing showed.

A company spokesperson said some of the employees would be retained and relocated to other facilities, including the recently opened distribution centre in greater Los Angeles area.

The retailer in 2021 had entered into a new lease for an about 1.26 million-square-foot distribution centre in Ontario city in California. The lease expires in 2039, its annual filing showed.

Lululemon, shares of which have dropped more than 31 per cent so far this year, also owns a distribution centre in Groveport, Ohio, while leases majority of its other facilities located across the United States, Canada and Australia.

(Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar)