Photo by David Castellon Opening last summer, the Ulta Beauty distribution center in Fresno is busy, accounting for 21 percent of the retailer’s e-commerce.

published on April 11, 2019 - 2:32 PM
Written by Gabriel Dillard

It’s nearing a year since the Ulta Beauty distribution center opened in Fresno, and according to a recent earnings call for the cosmetics retailer, so far so good.

Which is more than can be said about an Ulta distribution center in Phoenix, Arizona.

In addition to employing more than 500 people, the Fresno warehouse is moving makeup like gangbusters, now serving 235 stores and 21 percent of e-commerce orders, according to CEO Mary Dillon, in a recent Q4 earnings call for investors.

“Our Fresno DC [distribution center] is ramping up more quickly than our previous DCs,” Dillon said, according to a transcript.

It was a good fourth quarter all around for the retailer, which reported an increase in same-store sales of 9.4 percent, compared to the expected 7.9 percent.

Ulta boosted its merchandise inventories to $1.21 billion at the end of fiscal 2018 compared to $1.09 billion at the end of fiscal 2017, driven by 100 new stores as well as the Fresno distribution center.

At the same time, Ulta was expected to finish closing its Phoenix distribution center by last week. While Ulta declined to comment on the closure and if it was related to the Fresno center’s opening, the Phoenix Business Journal reported in December 2018 that it was not related.

The Phoenix warehouse comes in at about 330,000 square feet with 200 employees, compared to 670,500 square feet in Fresno’s warehouse. The Phoenix facility opened in 2007.

Lee Ann Eager, president and CEO of the Fresno County Economic Development Corp., told the Phoenix Business Journal that Fresno is competitive when it comes to landing large distributors.

“We haven’t found there is this mass exodus [of companies] leaving California because of high rates,” Eager said. “We certainly have incentives in California, specifically in the Central Valley, in order to attract new businesses here.”

Those incentives include an $18 million rebate on sales taxes and an $8 million tax credit. In addition, Fresno County’s New Employment Opportunities (NEO) Program for three months pays up to 100 percent of the salaries for employees who receive public benefits, and 75 percent for the following three months.

Eager said economic development officials had been working to get Ulta here for five years. For her part, she didn’t know about the developments in Phoenix.

“We didn’t know they were closing anything down. We assumed it was a brand new distribution center,” she said.

In Fresno, it looks like things will only get busier for Ulta. For fiscal 2019, the company plans to open about 80 news stores and boost e-commerce by 20-30 percent.

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