June 3, 2013, 10:23 AM

Fab.com plans to build its second warehouse

Web-only merchant Fab.com will build a second warehouse near Las Vegas.

Lead Photo

A look at Fab.com's redesigned site.

Fab.com will build a 450,000-square-foot warehouse in North Las Vegas, according to the Nevada Governor’s Office of Economic Development.

The e-retailer will invest $24.3 million in the project and initially hire 34 full-time employees, the governor’s office says. The merchant will also hire more than 200 contract employees and some seasonal employees. Fab.com did not respond to a request for comment. The office awarded Fab.com tax breaks as an incentive for putting the warehouse in Nevada, but a spokeswoman would not detail the exact amount.

Fab.com is No. 150 in the Internet Retailer Top 500 Guide. Its 654% year-over-year growth in online sales to an Internet Retailer-estimated $150.0 million in 2012,makes it the third fastest-growing e-retailer in the guide.

When the web-only merchant launched in June 2011, it drop shipped from suppliers an overwhelming majority of its orders, its CEO Jason Goldberg has told Internet Retailer. Delivery times often stretched up to a month or more,  and this was the merchant’s biggest complaint from customers, he says.

Over the last year, Fab.com has invested millions into adding inventory and building its first fulfillment center in Edison, NJ, that it dubs “The Rack.” While a power outage at The Rack and its New York City headquarters caused by Hurricane Sandy in October created problems for the e-retailer, more than 70% of orders shipped this past holiday season were fulfilled directly by Fab.com, Goldberg says.

Reducing delivery times even more remains a priority for the e-retailer, he adds.

Fab.com has built its success thus far on flash sales, offering a small selection of discounted items for a limited time, but has recently moved away from that strategy. The merchant still adds a set of products from a handful of designers each day, but began last month making more prominent on its e-commerce site a permanent assortment of its own brand of products, as well as items in such categories as home, women, food and jewelry. In early 2012, Fab.com had 2,000 SKUs available each day; now that number stands at about 15,000.

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