In the most recent phase of its multi-year supply chain optimization initiative, Lumber Liquidators announced its plans to construct a new East Coast distribution center, as well as lease another one in Pomona, Calif.
The new East Coast center in Henrico County, Va., will take place on 110 acres of recently purchased undeveloped land. The planned 1 million-sq.-ft. distribution center will help consolidate its current 750,000 sq. ft. of distribution space spread out among four buildings in Hampton, Va. The company expects a boost in operational efficiency, as well as reduced transportation and occupancy costs to benefit its margin.
Meanwhile, the 500,000-sq.-ft. distribution center in Pomona will be ready for occupancy by November 2013 and will be in full operational mode by the first quarter of 2014. The move aims to strengthen the company's operating income through improved product availability, reduced international transportation costs and lower delivery costs.
"The consolidation of our East Coast distribution facilities into a new, larger location and the opening of a West Coast distribution center will ensure we can support the tremendous growth of our business and improve service to our expanding customer base," said president and CEO Robert M. Lynch. "These new facilities will provide a more efficient supply chain structure, allowing us to improve the availability component of our industry-leading value proposition, as well as increase our labor productivity and lower our transportation costs. At the same time, we are pleased to be creating additional jobs in California and Virginia through these new facilities. These investments in our supply chain will provide the foundation for our long-term growth -- to continue to expand our footprint and capture additional market share in a recovering macro-environment."
The new building in Virginia is due for completion in the third quarter of 2014, and is expected to be funded using existing cash and operating cash flow.