Dive Brief:
- Boot Barn has opened a distribution center in Kansas City, Missouri, to service its stores in the eastern U.S. while relieving capacity for its Fontana, California, facility, President and CEO Jim Conroy said on an earnings call last week.
- The 460,000-square-foot facility has the capacity for about 6 million units and uses automation, according to an investor presentation. Receiving activity at the center began in April, with distribution expected to commence this month.
- The Kansas City facility will also be able to provide "some value-added services that are presently done in the stores," Conroy said, although he didn’t disclose further details. These services will allow store employees to instead focus on customer service and generating sales.
Dive Insight:
Boot Barn's launch of the Kansas City distribution center was in the works as the nearly 400,000-square-foot Fontana facility was hitting its maximum capacity to support rapidly climbing sales, Conroy said.
"Kansas City is coming online as originally scheduled, but our sales line is sort of way ahead of plan," the CEO said.
The new facility adds to the string of distribution center openings in Missouri in recent years, with companies highlighting the state's central location, incentives and labor pool as reasons they selected the state for distribution operations.
Boot Barn already had a central U.S. facility in Wichita, Kansas. But that smaller fulfillment center primarily handles e-commerce orders, while its Fontana distribution center takes care of stores almost exclusively, Conroy said. Now, the company has Fontana servicing western U.S. store locations, while Kansas City covers eastern U.S. stores.
The added capacity will be particularly important as Boot Barn ramps up its exclusive brand initiatives, which both the Kansas City and Fontana facilities support, according to its annual financial report. Boot Barn's inventories increased about 24% YoY for the quarter that ended April 1, with about 30% of that growth tied to inventory in distribution centers supporting its exclusive brands, executive vice president and COO Greg Hackman said on the call.
"As we grow brand penetration, we need to house more of that inventory in those two distribution centers," Hackman said.
Boot Barn's distribution center capacity with the Kansas City facility addition should match the company's needs for the next several years, according to Conroy.
"The next one would come on in, call it, 2028 or 2029 or something like that," Conroy said. "And it would be even further east to take care of the stores that have been built on the East Coast."
