Gap Inc. investing $140 million to build Texas DC amid rising online sales

Gap Inc. is investing in a new fulfillment center as it looks to double its digital sales during the next couple of years.

The retailer is investing $140 million to build an 850,000-sq.-ft. distribution center in Longview, Texas, that will feature leading-edge technology and be able to process up to one million packages a day. Construction will begin this April, with the center expected to be fully operational by August 2022.

The new center will supplement Gap’s six existing distribution centers in North America, including those in Fresno, Calif.; Phoenix; Groveport, Ohio; Gallatin, Texas; Fishkill, N.Y; and Brampton, Ontario. The retailer said it had plans in place to open a new facility beforehand. But as a result of changing customer needs during the pandemic, the timeline was accelerated to create more capacity for online growth.

“As we look to deliver on our three-year strategy and double our online business, we needed to expand our fulfillment network to provide a great experience for our customers today and ensure we have the ability to grow in the future,” said Shawn Curran, COO, Gap Inc.

As previously reported, Gap is moving to a business model that is driven by e-commerce and off-mall locations. The retailer is planning for e-commerce to account for about half of its sales by fiscal 2023. In its third quarter, ended Oct. 31, digital sales accounted for 40% of Gap’s total sales and added more than 3.4 million new customers online.

Gap anticipates the new facility will create more than 500 full-time jobs in Longview by the end of 2023 and will grow to more than 1,000 full-time jobs in the city over the next five years. Additionally, the company expects to create more than 1,000 part-time and seasonal jobs by 2026