Tuesday, July 27, 2021

Bed Bath & Beyond Plans Massive Distribution Hubs - 1M SF In PA

 By Linda Moss CoStar News

Bed Bath & Beyond, among the national retailers trying to modernize supply chains to meet the demands of e-commerce, is partnering with a third-party logistics firm to open large distribution centers in Pennsylvania and Southern California.

The Union, New Jersey-based home goods company said Monday it struck a deal with Ryder System of Miami, which will be developing and operating regional facilities "that will reduce product replenishment times to Bed Bath & Beyond and Buy Buy Baby stores to less than 10 days from the current 35 days."

The first distribution facility will be 1 million square feet, with the potential for expansion, in Frackville, Pennsylvania, near Scranton. It will supply merchandise to stores throughout the Northeast for both in-store shopping and online shopping services such as buying online, picking up in the store or curbside, same-day delivery, and shipping from store, according to Bed Bath & Beyond.

The move marks something of a battle of the warehouses between e-commerce giant Amazon and other retailers trying to keep up with online shopping demand.

Bed Bath & Beyond, under the new leadership of CEO Mark Tritton, has been trying to overhaul and streamline its online fulfillment service, which the company has conceded lagged far behind the industry. Like other traditional brick-and-mortar retailers, Bed Bath & Beyond is competing to offer seamless online ordering and quick delivery like that of Amazon and fellow retailers Walmart and Target, where Tritton once worked.

A former mall in Frackville, the Schuylkill Mall, has been demolished and replaced by a 1 million-square-foot industrial property that NorthPoint Development of Riverside, Missouri, developed on speculation, without having a tenant immediately signed. That logistics complex, called Tradeport 124, will ultimately have two buildings with 1.3 million square feet.

A vast number of retailers have distribution centers in Schuylkill County, the mostly rural area where Frackville is located. The tenant list includes Walmart, Lowe's, Hudson's Bay and Big Lots. And Amazon plans to open a 1 million-square-foot fulfillment center nearby in a new facility in the Valley View Business Park in Jessup, Pennsylvania.

Frackville itself is near the intersection of Interstate 81 and Pennsylvania State Route 61, about 102 miles northwest of Philadelphia and 45 miles southwest of Wilkes-Barre. Bed Bath & Beyond's distribution center there will open this fall, and Ryder will then open a similar facility next year in Southern California. The distribution hubs will each create 300 new jobs in their local communities.

In October, Bed Bath & Beyond announced plans to allocate $250 million of capital investments to overhaul its distribution system.

"The modernization of our supply chain is one of our core operational transformation initiatives to create greater efficiencies and reduce 'out of stock' occurrences for our customers," John Hartmann, chief operating officer for Bed Bath & Beyond, and president of Buy Buy Baby, said in a statement.

"As we provide our customers with an omni-always shopping environment, it is imperative for our growth to invest in our supply chain to ensure that we are meeting the needs of the business and our valued customers," he said. "Ryder is a clear leader in logistics, and we look forward to leaning on their expertise and capabilities to help modernize our supply chain and distribution network operations."

Bed Bath & Beyond has taken a number of actions to to update its supply chain as its digital orders have soared, including selecting Oracle earlier this year as the company's enterprise resource planning technology provider and the announcement of Relex Solutions, a retail-focused omnichannel tool that will provide real-time visibility into the supply chain.

"These added technology solutions will enable the company to track the merchandise and products stored and distributed by these new regional distribution centers, enabling greater efficiencies and capabilities to plan and forecast product replenishment to improve in-stock positions and speed to market," Bed Bath & Beyond said.

The retailer last week reopened its newly redesigned flagship store in Manhattan, a showcase of its plan to remodel 450 stores.


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