thredUP closing Vernon Hills distribution center, laying off 243 workers
A national online clothing consignment business is closing its distribution center in Vernon Hills and laying off 243 employees.
The lease for thredUP's facility at 100 Lakeview Parkway is ending and the company is moving its Chicago operations to "the more scalable and cost-efficient facilities" in Mechanicsburg, Pennsylvania; Suwanee, Georgia; and Phoenix, according to a company statement.
Headquartered in Oakland, California, thredUP notified Illinois labor officials Jan. 15 of the pending closure of its general warehouse and storage facility in Vernon Hills, and permanent layoff of 243 workers on March 19.
The Illinois Worker Adjustment and Retraining Notification Act requires applicable employers to provide advance notification of a plant closure or mass layoffs.
"Moving forward, we'll continue to invest in and open distribution centers that have the footprint to best support thredUP's growth," according to the company statement.
The company declined to comment on current sales or performance. But thredUP's 2020 Resale Report published last June said the company maintained 20% growth since shelter-in-place orders started.
In the report, President Anthony S. Marino said the orders accelerated a shift toward shopping online.
"As a result, opportunities are expanding for the strongest e-commerce and marketplace businesses," Marino wrote.
The move from Vernon Hills is the "right business decision," according to the company, but changes impacting employees never are easy.
"We are encouraging these employees to stay with thredUP and relocate to one of our other distribution centers, as we are actively hiring in those locations," the statement continued.
thredUP is an online marketplace buying gently used women's and children's clothing and reselling them for a discount off the retail price.
The company in late 2015 opened a 145,000-square-foot facility in Vernon Hills' Continental Executive Park. In April 2019, it announced it was hiring for all stages of processing and distribution there as it scaled up operations.
The company said it's offering relocation support or severance to its Vernon Hills workforce, and holding interview and resume workshops.
"In addition, we're bringing companies that are hiring on-site to help those who would like to pursue new opportunities," according to the company. "The team has been informed as early as possible to help them transition by March 19."
Retail consultant John Melaniphy III, whose firm has provided consulting services to Vernon Hills since the early 1990s, said thredUP's business model of secondhand clothing has not been immune to the nationwide decline in apparel sales.
He agreed online shopping has accelerated but the apparel category overall has been adversely impacted by the pandemic as employees work from home.
People have less need to dress up when they don't have to report to an office, he added. A "dressing down of America" in recent years also has depressed apparel sales, as consumers adopted more casual and athletic wear, Melaniphy said.
Apparel sales in the Chicago metro area dropped $357 million - about 27% - in the first three quarters of 2020, compared to the same time period in 2019, he added.
"Apparel sales in malls have been in a free fall as many malls closed during the pandemic. The majority of retail bankruptcies have been in apparel stores," Melaniphy said.