Lululemon ($LULU) Set to Lay-off 128 Employees

Lululemon Athletica ( LULU ), the Vancouver-based apparel retailer, has announced the closure of its distribution center in Washington state by the end of the year, resulting in the layoff of over 100 employees. The company cited business optimization efforts as the reason behind the closure. According to a WARN notice filed with the state's Employment Security Department, the Sumner distribution center will be shuttered, and 128 jobs will be cut beginning June 21.

The move comes as Lululemon ( LULU ) experiences slowing demand for its premium athleisure in North America, which has resulted in lower orders for sportswear and apparel firms due to excessive inventory levels at sporting retailers.

Lululemon ( LULU ) has stated that some of the employees affected by the closure will be retained and relocated to other facilities, including the recently opened distribution center in the greater Los Angeles area. The retailer had entered into a new lease for an approximately 1.26 million-square-foot distribution center in Ontario city in California in 2021, which will expire in 2039, according to its annual filing.

Lululemon ( LULU ) also owns a distribution center in Groveport, Ohio, while leasing the majority of its other facilities located across the United States, Canada, and Australia. The company's shares have dropped more than 31% so far this year.