VARGO®s omnichannel solution at the American Eagle Outfitter distribution center in Hazle Township was featured in July in The Standard Speaker.

125 jobs coming to AEO facility

By JIM DINO

The American Eagle Outfitter distribution center in the Humboldt Industrial Park is expanding — not physically, but by the number of customers it serves.

The expansion will also mean an employment expansion of 125, the facility’s director of operations said.

The expansion is possible because of the addition of computer software that allows the Humboldt facility to begin handling American Eagle Outfitter store inventory needs, as well as direct e-commerce customer orders, which the center has been doing since it opened its doors a year ago.

“While the facility will have the capability of servicing all the stores in the chain, the Hazle Township distribution center will primarily service 416 stores, approximately 50 percent of the retail inventory,” said Christine Miller, director of operations at the distribution center.

The center also will continue to fill all direct-to-customer, e-commerce orders for the eastern half of the United States.

When the facility opened last year, Miller said an evening shift would be added Monday through Thursday once it started to handle retail customers.

The center is now operating seven days a week.

American Eagle, based in Pittsburgh, plans to close its distribution facility in suburban Warrendale at the end of the month. The 200 people who worked at Warrendale were offered jobs at Humboldt, but the company did not know how many would accept the offer.

Warrendale’s distribution center, which only ships to stores, didn’t have the space to expand, the company said. The Humboldt facility is 1 million square feet — the largest structure in the Hazleton area — and still has room to grow on 120 acres.

Last year, Miller said the local center would employ as many as 600 people during busy seasons. According to rules tied to the project’s financing, the center will create 369 jobs within four years.

VARGO, a material handling company located in Columbus, Ohio, went live with its Continuous Order Fulfillment Engine software system on June 15. The change definitely will add to the work flow in Pennsylvania, said Art Eldred, a client executive for systems engineering at VARGO.

In 2014, the facility could handle a peak of 216,000 units a day for direct-to-customer orders, a 50 percent increase above their original goal for the first year.

For 2015, VARGO and American Eagle expect that peak to stretch to almost 450,000 units a day for direct-to-customer orders and a peak of almost 245,000 units a day on the retail replenishment side.

“What’s most impressive is that the fulfillment center in Hazle Township is capable of reaching 90 percent of American Eagle Outfitters’ retail customers in two days or less,” said Michael Vargo, president of VARGO

The system is designed to allow workers to simultaneously pull orders for both customer (or e-commerce) online orders and the store-replenishment orders (called put-to-store).

“What is really different here is that the people doing the picking do not know whether each pick is for a direct-to-consumer order or for store replenishment,” said Carlos Ysasi, vice president of integrated systems for VARGO. “In this distribution center, there is no difference, just one inventory with a seamless transition.”

The ever-growing e-commerce business drove American Eagle to this point. Americans spent $100 billion shopping online for the 2014 Christmas season, and nearly $300 billion for all of 2014, according to the U.S. e-commerce forecast by Forrester Research.

“We needed the infrastructure to support that growth,” David Repp, vice president of North American distribution at American Eagle, told DC Velocity magazine in January.