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Ross Stores is pulling out the stops to widen its logistics network, investing $450 million to build a new distribution center in North Carolina.
The 1.7-million-square-foot warehouse will be located in Randleman, N.C., and will be the company’s ninth distribution center. The facility will span 330 acres for warehousing, fulfillment and packing operations.
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Two other distribution centers are currently located in neighboring South Carolina, making the Randleman facility the third hub in the southeastern U.S. The off-price retailer also operates three distribution centers in California, as well as one in Arizona, one in Texas and another in Pennsylvania.
Sourcing Journal reached out to Ross Stores. The off-price retailer has not revealed when it expects the warehouse to be fully completed and open.
North Carolina Governor Roy Cooper made the announcement, saying the warehouse would create 852 jobs, and would create a potential payroll impact of more than $39 million for the region each year.
“We are delighted to welcome Ross Stores to Randolph County,” said Governor Cooper in a statement. “Nationally recognized brands like Ross will appreciate the quality of life in North Carolina as well as the capability of our world-class workforce to help them grow and succeed.”
The new DC comes as the discount retailer has been cutting distribution costs, bolstering the company’s operating margin 2.05 percentage points in its recent first quarter.
Adam Orvos, chief financial officer of Ross Stores, attributed the reduced expenses to higher productivity within its facilities.
“We had higher productivity in our distribution centers,” Orvos said in the company’s May 23 earnings call. “We opened a new facility in Houston a couple of years ago. So that’s getting fully ramped up. That’s providing productivity benefits.”
In that call, he called the current hiring environment and employee retention environment as “favorable.”
“We’ve made investments in productivity in the distribution centers. And then lastly on that front, I’d say the $0.02 of benefit that we talked about in timing is largely pack-away benefit that kind of impacts the DC cost,” said Orvos. “As expected, we had better domestic freight costs in the quarter, and we would expect that to continue through the balance of the year. It’ll be a little bit choppy, but at somewhat similar levels. We went through a bidding process, felt good about those results.”