Retail: 60
Retail: 189
Mon, Aug 28, 2017
Vol 1, Issue No. 33

Brooks Running Suffers Growing Pains with New DC

The top brand in the running specialty channel continues facing delivery challenges due to woes associated with its new North American distribution center, forcing its retail partners to scramble to assuage special-order Brooks’ customers and sometimes complete Brooks’ fill-in orders with running styles from other companies.

Brooks Running COO Dan Sheridan, in a May 17 letter to retail accounts, said the company’s delivery delays are likely to continue through June as it aims to reach better operational consistency at the 400,000-sq.-ft. DC in Whitestown, IN, some 22 miles from downtown Indianapolis. Ahead of the Memorial Day holiday weekend, Sheridan confirmed the company, going forward, would focus on June 1 and July 1 deliveries with no special emphasis on at-once orders.

“I want to assure everyone that we are approaching these challenges with the utmost urgency and sincerity and leaving no option off the table,” Sheridan wrote.

One running specialty store owner we spoke to told us he stocked up on Brooks’ styles ahead of the company’s DC switchover and has informed his key special-order customers about the delivery delays. He says he's worried about significant impact on his business if scheduled June 1 deliveries can’t be shipped in a timely manner.

The Brooks DC, when operating with complete efficiency, will deliver most orders to runners within three days via ground shipping and lower carbon emissions by approximately 50 percent compared to Brooks’ previous facility in Sumner, WA.

Owned for more than a dozen years by Berkshire-Hathaway, Brooks has faced a couple of key business hurdles this months after a stellar 2018 and early 2019 where the topline grew 22 percent through April 30. Outside DC issues, the Seattle company is faced with lessening its reliance on China as a footwear production source due to the possibility of higher tariffs and diversifying its supply chain. Brooks’ CEO Jim Weber says the company is exploring a third country beyond China and Vietnam to begin producing footwear in 2020 and eventually small production runs in the U.S., he told Reuters earlier this month.

Brooks Running global revenues rose 26 percent to $644 million in FY18 on 28-percent footwear growth and a 7 percent gain in apparel. With its longer-term annual revenue objective set at $1 billion by the end of 2020, Weber is eying 16 percent revenue expansion to $750 million this year.

It’s unclear at this point if the current DC woes will hinder that objective.