Urban Outfitters to bring 2,000 jobs to KCK project developed by Ross Perot Jr.
Philadelphia-based Urban Outfitters Inc. plans to create upward of 2,000 jobs at a new distribution center it says it will build near the Kansas Speedway.
The company, which operates various brands, including Urban Outfitters, Anthropolgie and Terrain, plans to occupy nearly 1 million square feet of new space built near the intersection of State Avenue and Speedway Boulevard in Kansas City, Kansas.
Gov. Laura Kelly and other officials are scheduled to announce the decision by Urban Outfitters during a live streamed news conference Wednesday afternoon.
Urban Outfitters had been looking for a home for its new distribution center before the pandemic, said David Ziel, the company’s chief development officer. He said the firm identified the Kansas City area months ago and considered sites on both sides of the state line. The company’s brick-and-mortar outlets have struggled through the pandemic, but he said the company’s digital business continues to grow.
The company also has distribution centers in Pennsylvania and Nevada. The Kansas facility will be its largest and will service online orders and retail store needs across all of Urban’s brands, Ziel said.
“We needed to plan and make this move on the facility pre-COVID and pre-pandemic and we still need to,” he said. “We’re very excited because it’s going to be the center of our distribution network.”
Urban Outfitters, listed on stock markets as URBN, will seek economic development incentives to help build its new facility, but officials said specific negotiations are still ongoing.
Documents obtained by The Star identify Dallas-based Hillwood Development Company as the developer. That firm, which has built dozens of industrial, retail and residential projects around the world, is led by Ross Perot Jr., the son of the late Ross Perot, a billionaire who twice ran for president in the 1990s.
Officials with Hillwood did not respond to requests for comment.
In a statement to The Star, the Kansas governor said her administration has “prioritized rebuilding Kansas’ broken foundation” of education, infrastructure and economic development efforts.
“This new partnership between URBN and our state is proof that our efforts are working, and that the foundation we are building will encourage more companies like URBN to bring their businesses to Kansas,” Kelly’s statement said.
The distribution center is set for land currently owned by the Kansas Speedway. It’s near the site where the American Royal plans to build a $220 million agricultural village.
A spokesman for the Kansas Speedway declined to comment when asked about the project.
Ziel said he hopes construction can begin as early as October. The facility will occupy a footprint of about 880,000 square feet, though several mezzanines will vastly expand the work space.
He said it could take a number of years to ramp up to a workforce of 2,000. The facility will need white-collar managers, supervisors, maintenance technicians and standard warehouse workers. Most of the positions will be full-time, he said.
“They are good paying jobs with benefits,” Ziel said.
Citing the impact of the coronavirus pandemic on retail sales, Urban Outfitters in late March furloughed staff, borrowed $220 million, suspended rent payments and announced it would reduce its capital budget by more than $100 million by putting off future projects.
The injection of new jobs is welcome news for Kansas, which has seen a sharp increase in unemployment because of the coronavirus. The state’s unemployment rate stood at 7.5 percent in June.
“I’ve made a lot of building decisions. I feel as good about this workforce and the quality of people in Kansas as I ever have,” Ziel said.
Urban Outfitters operates a retail store in downtown Lawrence and on the Country Club Plaza in Kansas City. Antrhopologie also has a store on the Country Club Plaza and in Leawood’s Town Center Plaza.
The company reported its total net sales for the quarter ending April 30 dropped by more than 30%. In May, it shared preliminary earnings results that showed a net quarterly loss of $138 million.
But the losses were nothing unusual in the retail space, which has been ravaged by the pandemic.
“It struggled last quarter because everyone struggled. If your stores are closed, it’s hard to do business. It was a very sudden situation that occurred,” said Janet Kloppenburg, president of JJK Research, which analyzes the specialty retail sector.
Urban Outfitters has long been a leader in e-commerce sales, she said. And that’s helped it through the pandemic. While in-store sales were down, executives reported digital business growth of double digits in the first quarter.
“Urban was a pioneer in developing the digital channel because they felt it would meet their consumers’ needs better than relying on brick and mortar store traffic,” Kloppenburg said.
Urban Outfitters has maintained favorable inventory rates throughout the pandemic, she said, and has not had to resort to deep discounts to keep product moving.
A new distribution center will help the company fulfill online orders. And Kloppenburg said Urban Outfitters likely relied on its sophisticated algorithm that weighed demand trends over various geographic markets to choose the site in Wyandotte County.
“I can’t tell you why they picked Kansas City,” she said, “but believe me it wasn’t a whim.”
Jonathan Shorman, The Star’s Topeka correspondent, contributed to this report.
