Stitch Fix is closing its Pennsylvania warehouse, eliminating nearly 400 jobs in Bethlehem

The online personal shopping company Stitch Fix, facing revenue declines, is pulling out of its Pennsylvania warehouse location, with a first round of layoffs expected to take place in September.

It’s the latest in a string of job eliminations in the state at certain retailers, including both online businesses and brick-and-mortar stores.

Layoffs at Stitch Fix will continue in waves throughout the fall, according to a new closure notice filed with the Pennsylvania Department of Labor and Industry, which said 393 total employees will be affected. The last group is expected to be let go in February.

Last year, the company closed a facility in Berks County known as Mohnton Mills, a sewing factory that Stitch Fix bought in 2017 that produced an exclusive clothing line known as Mohnton Made. The Mohnton Mills closure eliminated 56 jobs, just months after the company started to see revenue growth reverse.

Founder and interim CEO Katrina Lake announced plans to close the Bethlehem warehouse on an earnings call last month, noting that the lease was near its expiration anyway. On the call, she said the Pennsylvania location — known within the company as the Bizzy — would begin winding down in the first quarter of 2024.

The company is also closing a Dallas warehouse (the Dizzy), reducing to three fulfillment centers in Atlanta, Indianapolis, and Phoenix. It’s also considering leaving the U.K. market.

Closing the two locations is expected to save the company $15 million per year, Lake said. She added that it will allow the company to keep less inventory while providing the personal shoppers on their staff with more options in each warehouse to send to clients.

“I want to thank all of our associates and team at the Bizzy and the Dizzy,” Lake said on the call. “We are immensely grateful for your hard work and commitment to our clients.”

Business was booming at Stitch Fix less than two years ago, with the company reporting year-over-year revenue growth of 22.8% for its 2021 fiscal year. While the company saw a profit in the final quarter of fiscal 2021, it ultimately reported a net loss of $8.9 million for the year. Stitch Fix started reporting revenue declines in 2022, and announced a leadership change and layoff of 20% of salaried staff in January.

In its most recent quarterly earnings, the company reported a 20% decrease in revenue and 11% decrease in clients from the year before. Revenue per active client was $502, down 9% from 2022, and the company reported a net loss of $21.8 million.

Retailers across the country have been trimming their footprints in a move to cut costs or in the face of financial struggles.

Conshohocken-based David’s Bridal announced planned layoffs of more than 9,000 employees earlier this year, and is reportedly in talks with a buyer that could keep stores open. New Jersey-based Forman Mills said last month that it may have to close stores and lay off workers, until it found a buyer and avoided bankruptcy.

National chain Bed Bath & Beyond wasn’t so lucky, and wound down operations at hundreds of stores across the country, including several in the Philadelphia region, this summer.

West Chester-based television shopping company QVC also saw staff reductions this year, when parent company Qurate, which also owns Florida-based Home Shopping Network, laid off 400 people as part of a larger strategy to lower costs. E-commerce shopping company Zulily, also owned by Qurate, shut down a warehouse in Bethlehem last year, eliminating more than 500 jobs there.

The most recent U.S. Bureau of Labor Statistics (BLS) employment report showed little change in retail employment in June, looking at the industry as a whole, but certain categories of retail have seen more significant declines. Building material and garden equipment retail jobs have been declining as well as furniture, home furnishings, and electronics retail jobs, BLS reported. The number of clothing, accessories, shoe, and jewelry jobs was also down in June, but BLS did not mark the decline as significant.