Duluth Trading Company launched an automated fulfillment center in Adairsville, Georgia, designed to process over half its direct-to-consumer orders during peak season. The $42.1 million facility — part of a $55 million capital plan — faced inventory depletion during Black Friday, contributing to a 1.8% year-over-year Q4 sales decline. To bolster capacity and service, Duluth struck a multiyear wholesale deal with Amazon, leveraging Prime fulfillment while focusing internally on digital and store operations. CEO Sam Sato confirmed the company reduced sales promotion frequency post-holiday to manage backlogs. The move reflects broader industry adoption of hybrid fulfillment models amid labor constraints and rising e-commerce expectations.
According to Supply Chain Dive, Duluth Trading Company has launched a new automated fulfillment center in Adairsville, Georgia, designed to handle more than half of its direct-to-consumer orders during the peak holiday season — a capacity target confirmed by President and CEO Sam Sato during the company’s Q1 earnings call on June 1.
Georgia Hub Anchors Peak-Season Logistics
The Adairsville facility — slated to go live in Q3 — represents the centerpiece of Duluth Trading’s $55 million fiscal-year capital expenditure plan. Of that total, $42.1 million is allocated specifically to “continued logistics optimization from introducing the new automated fulfillment center,” as stated in the company’s 2022 annual report. The hub is engineered to improve order accuracy and speed, directly addressing e-commerce customer expectations for rapid, reliable delivery. Its strategic location in the Southeast supports regional inventory distribution and reduces transit times for key markets across the eastern and southern United States.
Duluth Trading’s prior reliance on its Belleville, Illinois, facility became untenable during the Black Friday and Cyber Monday surge, when inventory at Adairsville was rapidly depleted. Because Belleville has less processing capacity than Adairsville, the company had to divert fulfillment there to clear an order backlog — a stopgap measure that strained throughput and delayed shipments. As a result, Duluth Trading’s net sales fell 1.8% year over year for Q4, which ended in February.
Strategic Shift to Wholesale Fulfillment via Amazon
To mitigate future seasonal volatility and reclaim internal bandwidth, Duluth Trading has entered a multiyear wholesale agreement with Amazon. Under this model, Duluth supplies inventory to Amazon, which then fulfills orders through its Prime network. This arrangement enables the workwear retailer to tap into the popularity of Prime shipping while freeing up time and resources to strengthen its own digital portfolio and physical stores, according to Supply Chain Dive.
The move follows broader industry trends: major retailers including Walmart and Target have similarly expanded wholesale partnerships with Amazon to leverage scale, speed, and last-mile infrastructure — particularly amid persistent labor shortages in warehousing and transportation. Duluth’s decision reflects a pragmatic recalibration rather than a retreat from e-commerce; it retains control over branding, pricing, and customer data while outsourcing fulfillment execution for select high-volume SKUs.
Operational Adjustments Amid Capacity Constraints
In response to fulfillment bottlenecks experienced during the most recent peak season, Duluth Trading opted to reduce the frequency of its sales promotions following Black Friday and Cyber Monday. As Sam Sato, President and CEO, explained:
“Duluth Trading opted to reduce the frequency of its sales promotions to help manage demand and fulfill the order backlog following the Black Friday and Cyber Monday stretch.” — Sam Sato, President and CEO of Duluth Trading Company
This tactical demand management helped stabilize inventory levels and allowed the company to prioritize order completion over promotional velocity. Still, the incident underscored structural gaps: even the Adairsville center — described by Sato as Duluth’s “most efficient” facility — could not absorb the full volume surge without support from lower-capacity sites. That shortfall triggered a broader review of warehouse automation investments, labor planning, and SKU-level allocation strategies across the network.
The company is now advancing parallel initiatives: scaling robotic picking systems at Adairsville, expanding cross-dock capabilities for faster replenishment, and piloting AI-driven demand forecasting tools trained on regional weather patterns, historical promotion lift, and local event calendars. These efforts align with industry-wide adoption of warehouse automation to address staffing challenges in “hard to staff” logistics roles — a challenge also cited by food and beverage companies deploying autonomous trucking partners like Gatik.
Source: Supply Chain Dive
Compiled from international media by the SCI.AI editorial team.
