GXO Logistics has announced a second major retailer this month is using its logistics services to fulfill e-commerce orders. The logistics spinoff from XPO is now shipping inventory direct to consumers for Saks from a GXO e-fulfillment center in Middletown, Pennsylvania.
The Tuesday announcement follows a similar announcement earlier this month when GXO said it will open a 715,000-square-foot facility in Goodyear, Arizona, for Abercrombie & Fitch (NYSE: ANF). The Saks operations will take place inside a 400,000-square-foot GXO (NYSE: GXO) facility in Middletown. Saks will occupy about 280,000 square feet and house about 50% of its overall product base at the facility.
Located about 10 miles southeast of Harrisburg in south-central Pennsylvania, the building is Silver LEED certified. It will employ more than 350 people and incorporate GXO’s advanced automation technologies including robots.
“When we launched Saks as a stand-alone e-commerce company nearly seven months ago, we set ambitious growth targets for the business and have quickly exceeded our initial expectations,” said Na Li, senior vice president of logistics and shipping for Saks. “With GXO, we are in an even better position to meet the higher demand of our business while providing fast and flawless shipping to customers throughout the peak holiday season.”
Saks created a separate e-commerce business earlier this year. Led by Insight Partners and HBC, the deal resulted in Insight providing $500 million for a minority stake in Saks.com, giving the e-commerce entity a $2 billion valuation at the time. Saks.com has about $1 billion in annual sales. Last week, a report emerged that Saks was working to take the e-commerce company public in an initial public offering that would value the business at $6 billion.
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Saks is leveraging GXO Direct for the new distribution effort. GXO Direct is a shared space distribution network that allows businesses to position inventory closer to the target customer. In addition to reducing fixed costs and transit times, the solution helps lower shipping miles and carbon dioxide emissions by reducing the need for expedited air transportation, which is six times more carbon-intensive than over-the-road transport, while providing flexibility for rapid shifts in inventory as demand changes, GXO explained.
“Our new Middletown e-fulfillment center allows us to respond to Saks’ e-commerce needs with speed and agility, which is particularly important at peak times such as the run-up to the holidays,” said Bill Fraine, GXO’s chief commercial officer. “GXO Direct is designed to leverage our scale, capacity and innovation to give companies unprecedented flexibility in serving their customers. We believe it will continue to help drive growth for GXO.”
GXO Direct now operates in 41 locations across the country.
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