San Bernardino: Broke, Yes, but One Sector’s Booming Published: Wednesday, 1 Aug 2012 | 4:28 PM ET By: Jane Wells CNBC Reporter:
There are challenges. The permitting process for ultra-big box developments requires patience, despite the jobs and taxes they bring. However, it’s unlikely many companies would choose to locate these facilities outside of California to Nevada or Arizona.
Longo says half the goods which come into the Los Angeles and Long Beach ports stay in California to be sold or finished. Trucking them too far east for distribution, means trucking a large portion back again.
Financing has sometimes been a challenge, and it’s one reason Skechers became a co-owner of its building, not just a tenant. “When construction loans became such a very difficult thing to obtain, we had to partner in order for that to happen,” said Skechers’ Paul Galliher.
The new center consolidates six separate buildings Skechers used to lease 30 miles west. The new plant may be further from the port, but Galliher said, “There’s more economic value to putting everything in one room.” More than 500 people work there.
But that isn’t what is claimed by Wynright, a company which specializes in material handling. Wynright was hired by Skechers for their layout and design of the new Distribution Center in Moreno Valley, and what do they state the benefit of the move into this new 1.8 million square foot box of cement was for Skechers?
SKECHERS, USA was able to achieve their goal of eliminating multiple buildings. This alone reduced transportation costs, reduced inventory issues by putting it all under one roof, consolidated their management structure, and reduced order cycle time. The new facility gives them ample space to meet their current needs with room to grow on site.
SKECHERS, USA can now process approximately 17,000 pairs of shoes per hour — more than double the number handled in its old buildings, and the system is capable of handling expected growth of 25%. The number of times a product is touched between receiving and shipping has been reduced by at least 50%.
Previously, 1,200 associates were required during peak periods; the new facility requires about 300 employees for average volumes and an estimated 500 during peak periods.
The new facility — as of 2011, the largest LEED-certified building in North America — has helped SKECHERS meet two strategic goals: it consolidates all North American distribution under one roof, and it sets the stage for continued growth.