Stitch Fix to close Bethlehem distribution center, laying off nearly 400 employees in coming months
BETHLEHEM, Pa. (CBS) – Nearly 400 employees at a Lehigh Valley distribution center will be laid off after Stitch Fix, an online personal stylist company, announces it will not be renewing its lease in Bethlehem after it expires later this year.
A notice was posted on the Pennsylvania Department of Labor & Industry website, announcing that the online personal stylist company will be closing its Bethlehem distribution center at 4770 Hanoverville Road, affecting a total of 393 employees.
"We continue to focus on delivering profitability and preserving cash flow," Stitch Fix Interim CEO Katrina Lake said in a press release about the company's third-quarter financial results. "We continue to focus on ways to drive efficiencies across our business, 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."
NOW | Nearly 400 jobs will be lost when Stitch Fix closes a Bethlehem warehouse.
— Nikki DeMentri (@nikkidementri) July 13, 2023
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Temple University Economist Joshua Mask says right now, the Philadelphia area has one of the strongest economies in the country. The unemployment rate in Philly sits at 4.1% as of May, just hovering above the national average last reported at 3.6% in June.
But he notes the data isn't real-time and could change as consumer spending habits shift.
The company's third-quarter fiscal year 2023 financial results shows a 20% decrease in net revenue year over year, as well as an 11% in active clients.
The Dallas distribution center is also expected to close as the company moves from its current five-distribution center network to a three-distribution center network. The company also said it is exploring "exiting the UK market" in fiscal year 2024.
"With our renewed focus on our styling first model we have identified an opportunity to optimize our operations while enhancing the client experience," the company said.
The Bethlehem layoffs due to the distribution center's anticipated closure are expected between September 2023 to February 2024:
- 9/8/23 (96 employees)
- 9/15/23 (66 employees)
- 9/22/23 (36 employees)
- 9/29/23 (26 employees)
- 9/30/23 (1 employee)
- 10/6/23 (13 employees)
- 10/13/23 (37 employees)
- 10/20/23 (34 employees)
- 11/10/23 (10 employees)
- 12/1/23 (61 employees)
- 2/2/24 (13 employees)
"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," Lake also said.