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rue21 expands distribution center

June 27, 2012
BY LINDA HARRIS - Business editor (lharris@heraldstaronline.com) , Weirton Daily Times

WEIRTON - If rue21 President, Chairman and Chief Executive Officer Bob Fisch had listened to conventional wisdom, he'd have sublet some part of his company's massive Weirton distribution center rather than spend millions to make it even bigger.

But anyone who's met Fisch will tell you he's anything but conventional.

"It was a big building and people felt it was too big a space," said Fisch, in town Tuesday to tour rue21's newly expanded distribution center in the Three Springs Business Park with state and local leaders as well as his management team. "But I had (my own ideas) of what this company would be and what I knew could happen. So we went from looking to sublet three years ago to saying we have to double the size of the distribution center."

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The distribution center now has roughly 380,000 square feet under roof, with state-of-the-art equipment and monitors. It's also considered employee friendly, with new, larger locker rooms for employees as well as a fitness center, a basketball court and a lunchroom.

Fisch balked at applying a dollar amount to the upgrade, saying that what the work gives the company is more important than what it cost.

"You have to spend money to make money," he said. "Weirton is a great opportunity or us. We could have looked at other areas for our distribution center, but we felt we could expand here."

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RIBBON CUTTING — Representatives of rue21 were joined in Weirton Tuesday by officials from the West Virginia Development Office, the Business Development Corp. of the Northern Panhandle and the Weirton Area Chamber of Commerce to celebrate the completion of a recent expansion at the company’s Weirton distribution center. The project resulted in the distribution center growing from 180,000 square feet to approximately 370,000 square feet. -- Craig Howell

The expanded distribution center can handle just over 1,600 stores double their pre-expansion capacity, which was 815. That in itself is a pretty good indicator of what Fisch has in store for the Warrendale, Pa.-based company.

"Our model is we go after strip centers, malls and outlet centers, not just the mall business," he said. "There's tremendous opportunity there. The real secret to our business is we go after underserved markets, smaller populationwe might shadow the Wal-Marts and Targets. Everybody knows there's about 4,000 Wal-Mart's in the U.S., so there's plenty of opportunity. If you give incredible fashion and great value, and do it consistently, the teen shopper is going to buy. We have a consistent business model so having 1,500-plus stores in the U.S., we believe, can be a reality."

Fisch said the consistency of rue21s business message speaks volumes.

"We opened 500 stores in a time when the economy has been tough," he said. "But our business model, I see big growth for our company. Whether it's good economic times or bad, we offer great value with incredible fashions. We're very predictable in our growth, very consistent in what we're doing."

And Fisch said that 1,500-plus target is, well, realistic: This year alone they plan to open 120 stores; over the last five years the company opened 500 stores

"This distribution center couldn't have handled 1,600 stores (as it was)," he pointed out. "Very few companies in the U.S. can go from 815 stores today and think they can still double their size."

rue21 General Manager Tom Winters said the distribution center processes 2.5 million to 3 million units a week, in and out. That works out to about 17 million units a year. "We have the ability to support 1,680 stores now," he said. "And we have the ability to add on to the building, add additional storage."

David A. Warner, executive director of the West Virginia Development Authority, said the numbers are impressive. "What's impressive is their investment, not just the bricks-and-mortar investment in a larger building it's the technology investment they've made in the actual distribution center," he said.

Warner said it's "a very good testament to the quality of the labor force, that they've chosen to expand herethat a company such as rue21, a nationally known retailer, has chosen to be here," adding that it couldn't have happened without the involvement of the City of Weirton and the Business Development Corporation of the Northern Panhandle.

"If it weren't for that spirit of collaboration, I don't see how you'd get things done," added Weirton City Manager and BDC board member Valerie Means. "You absolutely have to have those partnerships."

BDC Executive Director Pat Ford said rue21's decision to expand is good PR for the community, "we can show other companies that we can be the distribution point for their products nationally."

"They've made an enormous investment," he said. "Not only do they currently employ 141 people, but they anticipate having to hire anywhere from 10-15 full-time employees a year in the foreseeable future. I can see a point where over the next 10 years they might add another 150 people not only does it increase the value of the business park, it also increases the opportunity for other businesses located here to benefit."

rue21's Jeff Johnson said the company typically adds personnel incrementally as the holiday season approaches, though he points out they only take on what can be supported over the long-term - meaning that when employment numbers do go up, "we'll maintain (the increase) into the next year."

(Harris can be contacted at lharris@heraldstaronline.com)

 
 

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