YOUNGSTOWN, Ohio -- The Toys “R” Us distribution center will close this summer, costing the jobs of 70 workers, but the city’s economic development director is confident the space won’t remain empty for long.
The retail chain’s corporate communications manager, Linda Connors, confirmed that it would cease its operations at the Youngstown Distribution Center, completing outbound shipments Aug. 1.
“As an organization, Toys R Us continuously assesses the ongoing changing dynamics of our business. Over the past few years, as we have expanded our omnichannel capabilities, we have added the ability to ship online orders directly to and from stores,” she said. “Based on the success of this model, we have created greater efficiencies in our supply chain, which have enabled us to streamline operations.”
The Youngstown Distribution center opened in the early 1990s at the city-owned Salt Springs Industrial Park, one of the first former industrial properties acquired and redeveloped by the city under former Mayor Patrick J. Ungaro.
Located on 43.9 acres, the distribution center covers 244,000 square feet. According to the Mahoning County Auditor’s website, the property is valued at $11.3 million. It is owned by Equity Industrial IV LLC of Needham Heights, Mass. (CLICK HERE to see site details.)
A total of 70 full- and part-time employees now work at the Youngstown center and the company is “working diligently to place as many employees as possible at other company locations in the area,” the spokesman said.
Toys ”R' Us lost $653 million in its fiscal 2014, which ended Feb. 1, compared to earnings of $87 million in fiscal 2013. In March the company's newly appointed CEO, Antonio Urcelay, outlined plans “to make the company fit for growth by fixing foundational issues, putting disciplines into operational processes and right-sizing its cost structure. … As part of this evaluation, in a comprehensive review of functional areas throughout the organization, a number of opportunities were identified to streamline functions and reduce headcount,” the company said.
On June 1, the company closed its McCarran Distribution Center in Storey County, Nevada.
The closing of the Youngstown distribution center will have a “significant impact in that it affects the employees that are there,” said T. Sharon Woodberry, city economic development director. “It’s always a challenge when you have news of 70 employees who will be looking for some other type of employment.”
Still, Woodberry is confident that the space won’t remain vacant for long. The city gets multiple inquiries from companies looking for distribution space, she explained.
“Because of that demand I’m optimistic we will have an end user for that facility,” she remarked. “They’re a well-established company, state-of-the-art in terms of their investment, and I would imagine they kept that up to a [high] standard and kept the facility in good condition. So I do not think [finding a new user] will be a problem.”
Copyright 2014 The Business Journal, Youngstown, Ohio.
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