Wayfair scraps plans for distribution center

It seems Houston doesn’t have just what Wayfair needs.

The online furniture retailer has dropped its plans to open a $133 million distribution center in the northern part of the city, the Houston Chronicle reported. The facility had been expected to create up to 400 new jobs for the area.

Wayfair scrapped its plans for a 1.2 million-square-foot “fulfillment center” at 1550 Milner Road due to a change in the company’s business, a spokesperson told the outlet. The company already signed a lease for the space, which is expected to be completed in November, and is looking for a tenant that will take it over. Wayfair will continue to operate facilities in Austin, Flower Mound, Lancaster, San Antonio and elsewhere in Houston.

The warehouse, which is owned by San Francisco-based Prologis, is located in the 187-acre Presidents Park south of the George Bush Intercontinental Airport. 

Prologis and Wayfair had been in talks with the city to try to get a tax reinvestment zone for the facility, a move that would have saved the retailer more than $3 million over the next decade.

“We were looking forward to joining the Houston community and thank the city for the incredible partnership and support in this process,” a Wayfair spokesperson told the outlet in an email. “We’re working toward subleasing the space so that it can be used by another employer and can contribute to the success of the region. We are no longer pursuing any incentives from the city.”

After the pandemic drove up Wayfair’s sales due to more people staying at home and the need for online shopping, the company’s sales dropped almost 13 percent in the first nine months of last year. Financial analysts said they expect sales to drop by more than 6 percent in the last quarter. The Boston-based company has launched two rounds of layoffs in recent months, totaling more than 1,700 employees.

 — Victoria Pruitt