More job cuts at Lululemon as it closes U.S. distribution center

Canadian Athleisurewear giant Lululemon is set to close its distribution center in Washington, leading to the layoffs of 128 employees, according to a filing in the local state. Shares in the company have fallen over 31 percent since the start of 2024.

The job cuts are expected to commence on June 21, with plans to shut down the facility by the end of 2024, Reuters reported.The decision follows a comprehensive review of its infrastructure and fulfilment strategy. The Washington-based facility has been described as one of its “smaller distribution centers.”

"We regularly evaluate our distribution network to help shape and support the future vision of our business," a company spokesperson told Reuters.

Although Lululemon plans to retain some employees from the Washington facility, the shuttering will result in the reduction of just over 100 positions, reported Quartz Daily. Those who remain will relocate to other facilities, including its distribution center in Los Angeles, which recently opened.

Lululemon’s lease for its Sumner facility was set to expire in July 2025, as per SEC filings, leaving the company with five facilities after closing the Washington warehouse.

Lululemon has faced challenges in sustaining sales momentum in the crucial U.S. market. In the fourth quarter of 2023, the company reported a growth of 9 percent, significantly lower than the 29 percent growth from the previous year. This sentiment was reiterated during the company’s earnings call, where Calvin McDonald, Lululemon’s CEO, informed investors that "consumer demand is a bit weak" in the U.S., and the company is "navigating a dynamic retail environment."