Ulta Beauty Inc. will delay opening its Jacksonville fast fulfillment center until 2021, a decision made before the COVID-19 pandemic.
The beauty supplies company announced the decision in December as it reprioritized its spending plans. It previously said it would open the Jacksonville operation in summer 2020.
The company distributes and sells cosmetics, fragrances, skin care products and hair care products through its stores, including seven in Northeast Florida, and its website.
The coronavirus is affecting its operations, though. Its retail locations are closed because of the pandemic.
“Given COVID-19, we have since been operating in an uncertain environment and are evaluating a variety of scenario analyses to inform the best decisions we can make for our associates and our business,” said Ulta Public Relations Vice President Eileen Ziesemer in an email April 7.
Ulta Beauty is based in Bolingbrook, Illinois, near Chicago.
She said the company made the announcement about Jacksonville during its third-quarter earnings conference call Dec. 5.
CEO Mary Dillon said during the call that Ulta Beauty was working through its 2020 planning process and prioritizing its investment agenda “for a year that's likely to remain challenged from a top-line perspective, given the headwinds facing the cosmetics category.”
She said that while Ulta Beauty had not finalized its decisions, “we have decided to delay the opening of our Jacksonville fast fulfillment center until 2021.”
Dillon said Ulta Beauty also decided to maintain its investments to build international capabilities, which would support its entry into the Canadian market.
Ulta Beauty landed a permit in July to build-out a fulfillment center in the Park 295 Industrial Park in Northwest Jacksonville.
The city issued a permit for Jim Cooper Construction Co. Inc. to improve 202,471 square feet of tenant space for Ulta Beauty at a cost of almost $3.98 million at 2619 Ignition Drive.
Ulta Beauty will lease part of a 552,634-square-foot building, the first structure at the business park in development at Interstate 295 and Duval Road. NorthPoint Development of Kansas City, Missouri, is developing Park 295.
Tenant improvements show that Ulta Beauty will lease the northern part of the building, including about 7,100 square feet of office space.
Dillon said in March 2019 that the retailer would open a fulfillment center in Jacksonville in the summer of 2020.
Dillon announced the center, which will be its second fast fulfillment center to serve its e-commerce business, during a quarterly conference call with analysts and investors.
The first will open in a remodeled Ulta Beauty distribution center in Romeoville, Illinois, she announced.
In May 2019, the city confirmed that Ulta Salon, Cosmetics & Fragrance Inc. is Project Flamingo, which City Council approved Jan. 8, 2019, for a city grant of $1.425 million.
Ulta Beauty intends to invest $37.5 million to lease and equip the center to distribute private-label skin and hair care products.
City legislation calls for the project to create 30 full-time jobs by year-end 2021 at an average annual salary of $46,346.
The positions include managerial, logistical, warehouse, receiving and shipping, forklift operators, truck drivers and support staff.
The company likely will be hiring many more workers because only the 30 jobs are tied to the required annual salary to receive the incentives. Lower-wage warehouse jobs are not counted toward the salary threshold.
In addition, public documents say the company could hire 400 seasonal workers annually.
Fast fulfillment centers serve only e-commerce orders. Dillon said the facilities will be able to fill up to 30,000 orders per day during peak times, "increasing our network capacity and progressing toward our goal of two-day e-commerce shipping by 2021."
In a November presentation to analysts, Ulta Beauty said its goal is two-day e-commerce shipping by 2021.
On March 17, Dillon said on the company website that it was temporarily closing its Ulta Beauty stores across the U.S. as of 6 p.m. March 19. Customers still can shop online.
On April 2, Dillon said that in response to COVID-19, Ulta Beauty is reducing expense plans, suspending new hires, deferring merit pay increases for all corporate and store associates; reducing capital spending plans, particularly as it relates to new store openings, relocations and remodeling; and suspending its stock repurchase program.
As of Feb. 1, Ulta Beauty operated 1,254 retail stores across 50 states and also distributes its products through its website.