zulily invests $40 million in fulfillment center

Specialty apparel retailer zulily entered the northern Nevada market in October of 2011. In less than three years, the company that sells apparel and other items geared toward moms and babies is doubling its footprint at Tahoe-Reno Industrial Center.

And it’s doing so more quickly than many folks might have thought possible.

Seefried Industrial Properties broke ground in January on a new 707,000-square-foot Internet fulfillment center for zulily. Bob Spieth, chief operating officer for zulily, says the larger facility was needed to keep pace with increased customer demand for the more than 13,000 products offered by zulily.

“Our business is growing really fast,” Spieth says. “It will let us process more shipments and keep up with the addition of new brands and products that our merchandisers are introducing to our customers.”

A new build-to-suit fulfillment center also was needed to ensure zulily could provide adequate parking for its workforce, Spieth adds. The company currently employs about 1,000 in the area through a regional staffing firm and expects to have a workforce of more than 1,600 after the new $40 million facility is completed.

Just as importantly, though, the facility allows zulily to maximize the flow of goods through the shipping and receiving process, as well as design its extensive conveyor and sorting systems with increased operational efficiencies — the key to the zulily model, Spieth notes.

“We order product from vendors after we know what our customers want. The merchandise comes in and is immediately shipped back out. Very little product is staged as inventory in the fulfillment center.”

Zulily expects to complete the move-over from its old building in the third quarter. Company executives are still working out a detailed plan for the transition, Spieth says, but its customers shouldn’t see any disruption in service. The company expects to move its workforce between the two locations over the course of several weeks. The new fulfillment center services orders from western-region customers.

The biggest challenge associated with the project is its fast-paced development timeline, Spieth adds.

“We have a very aggressive timeline for construction of the facility. Our business is growing very rapidly and it’s important for it to be completed quickly.

“We remain really excited about the growth of business, and it comes from the great diversity and value of the products we are able to offer to our customers,” he adds. “This facility is just one of many parts able to support that growth.”

Seefried Industrial Properties is no stranger to fast-tracking large industrial properties at TRIC — it built the 872,210-square-foot warehouse and distribution center for PetSmart in March of 2008.

Jason Quintel, senior vice present for Seefried Industrial Properties’ western region office in Phoenix, says a typical construction timeline for a building of this size is nine months, but the company was able to shave 45 days off the construction schedule through extensive coordination, working overtime, and by breaking up its building permits. Storey County officials allowed Seefried to separate the mass-grading permit from the building shell so that dirtwork could get underway while it awaited final approval for the building plan.

F&P Construction excavated move more than 350,000 cubic yards of dirt to get the site ready for its concrete foundation, Quintel says.

“The amount of dirt that needed to be moved required a significant amount of equipment and manpower that few contractors could provide to the job site. That was the key to staring the schedule off on the right foot.”

A qualified team of subcontractors working overtime also has kept the schedule intact, Quintel notes. Companies involved in the project include:

General contractor Alston Construction

Tectonics Design Group for architectural and engineering work

Tedesco Pacific Construction for the concrete flatwork

Vasko Electric of Sacramento

RHP Mechanical Systems for the plumbing and mechanical systems

Alpine Roofing

Panelized Structures Inc. for the hybrid roofing materials.

“The overtime and additional hours that we threw at project and being worked by the contractors on site and coordinating with each of those trades who are working underneath, on top of and around each other really allow us to meet the schedule,” Quintel says. “It is really a team effort. We help coordinate, but those are the guys that are getting it done.”