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Subscription Commerce Takes Another Hit as Trunk Club Closes Chicago Facility

Earlier this week beauty products e-tailer Birchbox, known for its subscription service, cut staff for the second time in six months. On Tuesday, Trunk Club announced that 250 jobs would be eliminated by the closure of its distribution center in Goose Island, Chicago, adding to the growing belief that subscription commerce is on the way out.

Acquired by Nordstrom for $350 million in 2014, Trunk Club offers online and in-person concierge services for men and women. Customers can try on items at home or at the company’s “clubhouses” and pay for what they want to keep, with no commitment or minimum purchase requirements.

Goose Island will transition to its close by August 2017, impacting about 250 full- and part-time employees. Trunk Club said it will integrate its operations into its parent company’s network of fulfillment and distribution centers. Nordstrom said it will work to help employees interested in staying with the company find roles at the Trunk Club Chicago clubhouse or at nearby Nordstrom or Nordstrom Rack locations.

“As Trunk Club has grown significantly over the past several years, we’re continuing to find opportunities to support that growth while also giving our customers the best experience possible,” Brian Spaly, chief executive officer of Trunk Club, said. “While our space at Goose Island has served us well, we realize we’re going to outgrow it soon. We decided this was the right time to integrate Trunk Club orders into the Nordstrom fulfillment network, which will allow us to share more of their inventory and better serve our customers with a wider mix of merchandise.”

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Nordstrom has three fulfillment centers, located in Elizabethtown, Pennsylvania, San Bernardino, California, and Cedar Rapids, Iowa. The Cedar Rapids facility currently fulfills all orders for Trunk Club for Women. Integrating the rest of the Trunk Club business into the Nordstrom network will begin at the end of 2016.

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“It will take us some time to transition our operations and ensure we’re taking care of impacted employees, so we wanted to let our people know as soon as we could,” Spaly continued. “We still have a lot of customers to serve here, and we’ll be working with each of our employees over the coming months to share more details about our staffing changes and to discuss their individual opportunities.”

Nordstrom recently decided to delay any decision to build a fourth distribution center until 2020 in the hopes that market conditions will have improved. The Seattle-based retailer’s profits fell from $128 million to $46 million in the most recent quarter.