Startup wants to bring “micro-warehouses” to vacant retail

Fabric raised $136M to convert big-box stores or gyms into fulfillment centers

National /
Jan.January 18, 2021 10:30 AM
Fabric co-founder, CEO Elram Goren (Getty, Elram Goren via LinkedIn)

Fabric co-founder, CEO Elram Goren (Getty, Elram Goren via LinkedIn)

 

A startup that focuses on creating last-mile fulfillment centers aims to compete with logistics giants.

Fabric, which was founded in Tel Aviv but is now headquartered in New York City, has raised $136 million in funding from venture capital, Business Insider reported. The company has partnered with retailers on last-mile distribution centers, often by repurposing former big-box stores or gyms. (FreshDirect is one of its biggest clients.)

Last-mile fulfillment facilities have been in high demand as shoppers increasingly flock to online retailers, and the trend has only accelerated during the pandemic. Some developers and retailers have already experimented with turning empty storefronts into so-called “dark stores,” which exist for the sole purpose of fulfilling online orders.

Fabric’s centers are typically 10,000 to 15,000 square feet, which is much smaller than the typical Amazon fulfillment center, which clocks in at about 800,000 square feet. The startup works with its retailer partners by integrating its system into retailers’ existing stores, or by fulfilling orders from its own micro-warehouses. Those can typically process about 500 orders per day, the publication reported.

But the large conveyor belts in massive warehouses are no longer needed to create last-mile fulfilment centers, said Fabric’s Chief Commercial Officer Steve Hornyak.

“Now it’s a whole different approach to automation that allows you to shrink it down,” he said, noting that at the same time, retailers are scaling back on their store footprint, and excess space is often perfectly situated to become micro-fulfillment centers. “The big-box guys don’t need the entire square footage that they have, so why not leverage that in order to do e-commerce and click-and-collect?”

[BI] — Akiko Matsuda






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