Federated Department Stores is close to opening a state-of-the-art distribution center that will service only Macys.com and Federated’s direct-to-consumer business.
The 600,000 square foot facility located near Portland, Tenn., will open this spring and employ about 500 people, says Macys.com CEO Peter Sachse. The facility will support Federated’s direct-to-consumer businesses, including Macys.com, Bloomingdales.com, Bloomingdale’s By Mail, Macysweddingchannel.com and Bloomingdalesweddingchannel.com.
In March 2006, chairman, president and CEO Terry J. Lundgren announced that Federated would invest $130 million in its direct-to-consumer businesses, including Macys.com and Bloomingdales.com. The new distribution facility is the direct result of how the money was spent, says Sachse.
“We expect to achieve $1 billion in web sales within a few years,” he says. Macy’s online businesses have posted consistent double-digit sales growth over the past few years and are more profitable every year, Federated says. The company expects direct-to-consumer sales to grow to more than $750 million by 2008 from about $450 million in 2005.
Federated’s new distribution center will be supported by a tailored warehouse-management system from Manhattan Associates Inc. Federated currently fulfills online orders from distribution centers that primarily supply its stores.
The opening of a new direct channel distribution center comes at a time when Federated, No. 29 in the Internet Retailer Top 500 Guide, is consolidating other operations and brands as a result of its 2005 acquisition of May Co. In September Federated consolidated two former May information technology centers in St. Louis and Lorain, Ohio. The St. Louis data center was closed, affecting a systems development and computer operations staff of 195 employees. At Lorain, about 95 employees were affected as most computer operations and the help desk portions of the data center were consolidated.
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