Stitch Fix to shut down Lehigh Valley warehouse

Stitch Fix, the online personal styling service company, said Tuesday that it is shutting down its Lower Nazareth Township distribution center, affecting about 375 workers.

In its third-quarter earnings report, the San Francisco company said it is consolidating its distribution center network. Stitch Fix said in the report that it is not renewing its lease on the 483,990-square-foot distribution center at 4770 Hanoverville Road.

Stitch Fix CEO Katrina Lake said during Tuesday's earnings call that the company will "wind down" operations at Lower Nazareth this summer and close it by the time the lease runs out at the end of the year.

The federal Worker Adjustment and Retraining Notification Act requires employers to give workers at least a 60-day notification before closure.

Lake said in Tuesday's earnings call the company will save about $15 million by shutting down the Lower Nazareth location and another warehouse.

"We undertook a review of our operations and processes with a view to importing efficiencies, maintaining profitability and cash flow as well as identifying opportunities to enhance the client experience," Stitch Fix said in its report. "First with our renewed focus on our styling first model we have identified an opportunity to optimize our operations while enhancing the client experience.

"By moving to a three-distribution center network, from our current five-distribution center network, we will have greater depth and breadth of inventory available for our stylists to serve clients," it said.

Another warehouse in Dallas will be shuttered in 2024. The remaining three locations are Atlanta, Phoenix and Indianapolis.

Stitch Fix, which reported net revenue of $394.9 million, a decrease of 20% year over year, also announced that it is exploring exiting the United Kingdom market that it entered four years ago.

Its list of active clients was 3.4 million, a decrease of 431,000, or 11%, from last year.

"We continue to focus on ways to drive efficiencies across our business," Lake said, "while at the same time invest in the core capabilities that have set Stitch Fix apart from the beginning — personalization powered by our industry-leading data science and AI. Looking forward, we’re confident that we have the right strategy in place to return us to profitable growth while realizing our mission to help our clients look and feel their best."

The company was founded in 2011 and had an initial public offering in 2017 with a valuation of $1.6 billion.

Stitch Fix opened the Lower Nazareth distribution center in April 2016.

According to the Lehigh Valley Economic Development Corp., there are 13,314 transportation and warehousing workers in the Valley out of a total workforce of 349,000.

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