Speculation growing that part of Lawrence’s Kmart Distribution Center will remain open, serve e-commerce firms

photo by: Mackenzie Clark

The Kmart Distribution Center, 2400 Kresge Road in Lawrence, is pictured on Jan. 30, 2020.

There are signs that parts of Lawrence’s Kmart Distribution Center may remain open.

As we reported in late January, the company filed a federal form warning employees and the community that it was planning to close its facility at 2400 Kresge Road and eliminate 111 jobs in the process. Plans called for the closing to happen near the end of March.

That may still happen, but that is not the latest talk circulating around the massive warehouse complex, which is located just north of the Kansas Turnpike’s McDonald Drive interchange.

Kmart Distribution Center

A source at the center, who is knowledgeable of recent discussions but not authorized to talk about them, told me that the center may remain open as a distribution center that provides services to other companies besides Kmart and its parent company, Sears.

Think of all the firms that sell items over the internet. Many of those companies don’t have their own warehouses or shipping systems in place. Instead, they rely on third party logistics companies to store their products and get them delivered to customers. We’ve reported that some of that activity has been going on at the Lawrence location, but there may be more of it to come.

Sears has become a larger player in the world of third-party logistics in recent years, and there is talk it may use the 1.3-million-square-foot warehouse in Lawrence to grow that business. Sears owns a company called Innovel Solutions. When it was founded in 1939, it was known as Sears Logistics, but the company was renamed in 2014, as it started providing warehousing and delivery services for companies other than Sears.

The source at the Lawrence center said local managers were called to a meeting last week to receive a briefing on a plan to convert the Kmart facility into an Innovel facility. Some key details of the plan, though, weren’t available, including how many people the new facility may employ. It seemed clear from the meeting, though, that the center wouldn’t initially have enough business to save all 111 jobs that have been slated for elimination.

I reached out to the center’s local general manager, but I was told by a security guard at the center that he had no comment. I’ve got a message into Innovel about any plans it may have for the Lawrence facility.

Converting the facility into an Innovel operation would be consistent with what Kmart/Sears has done at some of its other locations. In Ocala, Fla., the local newspaper reported in March 2019 that Innovel took over a significant portion of the nearly 2-million-square-foot Kmart distribution center that had been operating in that community.

The local newspaper in Kankakee, Ill. reported in the spring of 2018 that a Sears warehouse in nearby Manteno, Ill. rebranded as an Innovel Solutions facility. In that article, it was reported the 1.5 million-square-foot Illinois facility was employing 185 people. But, that also was two years ago, and the fortunes of Sears/Kmart certainly haven’t improved during that time period.

Some analysts, though, have said the Innovel division is one of the better-performing pieces of the long-struggling Sears/Kmart enterprise. The 2018 Illinois article reported Innovel had reached agreements with Amazon, Costco and Electrolux, among others.

I haven’t heard anything that Lawrence’s center has become a hub for Amazon shipments, especially since the retailer has a giant facility in the Kansas City metro area. Instead, the source said the Lawrence center currently manages a large amount inventory of Kibbles ‘n Bits dog food. Smucker’s produces that dog food at a Lawrence plant that is next door to the Kmart distribution center.

The source also said the facility is doing some work for Ware2Go, a logistics company owned by UPS, and Merchtable, a local company that provides t-shirts, CDs, and other merchandise for the live music and concert industries.

The Lawrence center already appears to have some connection with Innovel. While the building’s main signs continue to list the facility as a Kmart distribution center, a bulletin board near the public entrance includes some postings that refer to the center as Innovel Solutions #8273.

The source at the center said while the potential for Innovel to keep part of the center open was positive, there is still anxiety among workers about how many employees may be kept in the future. The source said there are some signs that the new operation may not work on the same seniority system that has long been used for employment matters at the center, which may result in some of the longer-serving employees at the center not getting job offers.

In other news and notes from around town:

Plans have been filed for some new construction work in the industrial park near the Kmart center and the dog food plant, but it is uncertain whether the project will come to fruition.

Lawrence-based Schmidt Contracting has filed plans to build a 3,500-square-foot shop, office building and outdoor storage yard on the property at 908 N. Iowa St. That location is basically across the street from the Smucker’s dog food plant, or just a bit south of the O’Malley Beverage distribution center.

908 N Iowa St, Lawrence, KS 66044

But John Schmidt, the company’s president, told me he is no longer sure he is moving ahead with the project. He said he is having difficulty securing City Hall approvals for the project as it is currently designed.

“I would say everything is on hold right now,” Schmidt said.

The plans call for about a $500,000 project that consists of a fairly straightforward building with three overhead doors, about 300 square feet of office space, and a fenced side yard for construction material storage.

Schmidt didn’t provide details about what details are delaying approval.

As for the company, Schmidt Contracting does a variety of excavation work, home building and some commercial construction.


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