Chico's DC Automation Enables Rapid Growth

January 2013 Integrated Solutions For Retailers

By Bob Johns, associate editor

The boutique chain was able to streamline DC operations and distribute to all channels by implementing a sortation system.

Dave Dyer, CEO of Chico’s FAS, Inc., has a goal of opening 120 stores per year for the next five years. This is quite an ambitious undertaking in today’s competitive retail environment, where margins are slim and consumers lack brand loyalty. With direct-to-consumer sales increasing, and the brick-and-mortar footprint growing rapidly, fulfillment became an area of concern.

Chico’s FAS, which operates under the brands Chico’s, White House/Black Market, Soma Intimates, and Boston Proper, is a specialty retailer operating 1,350 boutiques featuring private label women’s apparel, accessories, and related products. Each brand also operates a brand-specific e-commerce site. All merchandise is fulfilled from two distribution centers, one exclusively working with brick-andmortar, and the second fulfilling e-commerce orders. Sales in both channels have been increasing steadily, which has created a rapid increase in the amount of product the DCs have to handle on a daily basis. With a largely manual system in place, the fulfillment process was beginning to bog down due to the rapid growth and inefficiencies. This had the potential to escalate into a bigger problem as sales increased. Many of the these inefficiencies were created by having duplicate services at each DC, since each DC had to have the same capabilities in the channel it serviced.