Ulta Beauty Inc. intends to open its first “fast fulfillment center” in the Southeast U.S. this year to improve its e-commerce speed of shipment.
In its November 2018 Analyst and Investor Day presentation, the Bolingbrook, Illinois-based company said its goal is two-day shipping by 2021.
The centers will be 175,000 to 200,000 square feet with “simplified operations.”
The description matches Project Flamingo, an unidentified distributor of private-label skin and hair care products considering Jacksonville.
“In support of Ulta Beauty’s growth, we will continue to invest in our distribution network. While we do expect further expansion, we have no announcements to share at this time,” Ulta Beauty said Wednesday in a statement.
In legislative documents, Flamingo is described as “a national distributor of an assortment of private label skin and hair products.”
Ulta describes itself as “the largest U.S. beauty retailer and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products and salon services.”
Flamingo wants to lease 200,000 square feet of e-commerce warehouse and distribution space in Northwest Jacksonville to serve customers in the Southeast creating jobs no later than year-end 2021. Construction would start by the end of 2019.
Ulta wants to open its first fast fulfillment center in 2019 and is looking at the Southeast U.S.
Flamingo has earned City Council approval.
Council approved Resolution 2018-828 on Jan. 8 to support a $1.425 million city grant for the project.
Flamingo plans to invest $37.5 million, comprising $24 million in machinery, equipment, furniture and fixtures, and to lease space in a Northwest Jacksonville building to be constructed for $13.5 million, according to the legislation.
Council members approved a Recaptured Enhanced Value grant worth up to 50 percent of the net increase in real and tangible property taxes over 10 years.
Flamingo will need to hire its full-time employees by the end of 2021. The positions will average $46,346 annually. The company also could hire 400 seasonal workers, although those jobs are not tied to the incentives.
The legislative fact sheet says that city-backed financial incentives are a material factor in the unidentified company’s decision to consider Jacksonville over locations in Alabama, Florida, Georgia and South Carolina.
Ulta Beauty is a publicly traded company that calls itself the largest U.S. beauty retailer. It has grown to become the top national retailer offering “the complete beauty experience,” it says.
As of Nov. 3, it operated 1,163 retail stores across the country and also distributes its products through its website. It projects 1,399 stores by year-end 2021.
It operates seven stores in Northeast Florida.
The company operates five distribution centers in Romeoville, the Chicago-area center that opened in 2012; Chambersburg, Pennsylvania; Greenwood, Indiana; Dallas; and Fresno, California, which opened in 2018. The presentation shows a Phoenix center is closing this year.
The centers are 300,000 square feet or larger.
The first fast fulfillment center will be a distribution center that services only e-commerce orders, is capable of fulfilling up to 30,000 orders per day during peak periods, holds about 25,000 SKUs and a smaller footprint of 175,000 to 200,000 square feet with “simplified operations.”
The presentation said a fast fulfillment center has substantially lower build and implement costs, reduced overall build timeline, less operating complexity and decreased inventory safety stock requirements.
Ulta reduced its e-commerce order cycle to three days and reduced the cost per shipped item by 25 percent. It reported that e-commerce sales rose from $200 million in 2015 to about $800 million in 2018.
Several distribution centers in Jacksonville appear to fit the needs, including the Park 295 Industrial Park at Interstate 295 and Duval Road.
A marketing flyer for that project shows the first 552,634-square-foot building under construction has leased 203,463 square feet to an unidentified tenant.
Property representative Ladson Montgomery, Newmark senior vice president and principal, said Wednesday he had no comment.