All Dressed Up and Nowhere To Go But Up

Saks Fifth Avenue Distribution Center brings rural St. Clair County, Alabama to the party.

By Laura Hendrix Corbin

Rural St. Clair County in Alabama decided to get itself dressed for success-a move that paid off big-time when Saks Fifth Avenue opened an 180,000-square-foot distribution facility in the town of Steele in the spring of 2001.

The area had called all the right people to the party, and dolled itself up with the right combination of a perfect location, a willing workforce, and the sheer will to do what needed to be done.

When Saks Fifth Avenue had narrowed a site search to in and around Birmingham, Ala., where it would consolidate three other distribution centers, the developers and local officials in Steele did "a great job of working together to make the process easy for us," said Walter Scott, Saks vice president and associate general counsel.

Saks looks for locations for its distribution centers by first looking at its distribution of stores, says Scott. "We look at getting the merchandise from various factories to the appropriate stores. It's a fairly broad spectrum. Obviously, it has to be along interstate highways because merchandise is all moved by truck." Generally, that's going to be in a rural location.

"We found that in Steele, we could have one point of contact because the entire community was working together to support our needs," Scott says. "That made locating there an easy, painless process."

Ed Gardner, director of the St. Clair County Economic Development Council, along with the mayor of Steele, county officials, the local technical college leaders and state officials worked together to bring the Saks facility to that area. "They pulled together all the right people and stepped up to the plate. Also, on the back end, they did what they said they would do."

Saks was the plum that the rural area needed, Gardner said. "Saks was the catalyst for much more growth. Without Saks, we would not have acquired the land we did for a new industrial park or built a new waste-water treatment plant that allowed us to attract more industry."

The location of the Saks facility, which employs more than 200 people, required the construction of the waste treatment plant. Instead of purchasing only enough property for the plant, the St. Clair County Economic Development Commission bought 240 acres, and through federal, state and local grants, then developed the excess land into an industrial park.

The result, Gardner explained, was that the county not only gained the Saks jobs, but it also attracted Yachiyo Manufacturing of Alabama, a tier I supplier for Honda Manufacturing, with an investment of $6.4 million and the creation of 60 new jobs. In addition, Southern Monopole, a manufacturer of metal power poles and cell phone towers, chose the rural county.

"The total impact is more than 450 new jobs and a private capital investment of more than $50 million," Gardner said, adding, "In order to prepare for a major expansion of Yachiyo, we are installing a 500,000-gallon water storage tank, and with additional grants, we are extending a sewer line that will save 30 jobs and allow an expansion of another manufacturing company that will create another 50 jobs."

"Through grants and contributions from local and state sources, we were able to provide land at a reasonable cost and all of the infrastructure necessary for the operation," Gardner added.

Those developments had a big impact on Steele, with its population of 1,200. The community, in the northern part of St. Clair County, is about 35 miles from Birmingham, the location of Saks' national headquarters. It is 70 miles from Chattanooga, Tenn. and only about 10 minutes away from Gadsden, Ala.

"We have an excellent school system that gets state, county and local support," Gardner said. "These projects have made us able to bring about a half million dollars a year into our schools. Between Saks, Yachiyo and Southern Monopole, we have increased revenues county-wide by about $500,000."

Saks was looking for a rural area with proximity to Birmingham, Gardner said, with access to an airport. The rural choice was to accommodate the 75 trucks that pull into and out of the plant daily.

The facility, the most productive of its kind in the world based on square footage, loads and unloads some 40,000 cases of merchandise a day, and more than 90 percent of that is done without touching human hands.

"It's a highly automated facility, where most of the jobs are computer operators," Gardner explained. "There is very little manual labor. It's nothing short of amazing. The trucks from the suppliers, like Tommy Hilfiger and Ralph Lauren, are unloaded by hand, then the bar codes are scanned and the merchandise is put on conveyors that take them to the various trucks for the Saks stores." The distribution center serves Saks' Proffitt's, Parisian and McRae's department stores.

All of this takes place in about six minutes, says Saks' Scott. "This is a distribution center, not a warehouse. We don't hold merchandise there. The local workers are very impressive."

That impressive work force, and the training they received, is one of the factors that make Saks happy it chose Steele. "The work force, the people and the training the state put forth are really of more value than we first thought they would be," Scott says. "The local officials kept telling us they would help us get the right work force and do all the pre-employment training. We had such a good internal process that we didn't put much value in that on the front end. On the back end, we have found it very helpful. It has helped us avoid mistakes, expensive mistakes."

That means a lot to St. Clair County officials. "The county had one of the highest percentages of its work force that is required to commute outside the county for a job," Gardner said, noting that most go to Birmingham, Gadsden or Anniston (to work for Honda). "We worked with the state in recruiting Honda, which by next year will employ some 4,000 people, but the work force in St. Clair County is very anxious to work closer to home."

And now, the Saks Fifth Avenue Distribution Center makes that more possible for more residents of this rural community.

Rural Alabama also HOT for Automotive Suppliers

Like many rural areas across the nation, Alabama's rural counties have been hit hard in recent years by manufacturing and textile job losses. Alabama may have an advantage over other states, however, with the trickle down effect of the boom of its automotive sector.

As much as 40 percent of Alabama's automotive work force hails from counties other than the one in which the OEM is located. This is good news for rural areas surrounding Mercedes' Tuscaloosa plant, Lincoln's Honda plant, Huntsville's Toyota engine plant, and now Hyundai's future Montgomery plant.

Additionally, many of these plant's tier one and tier two suppliers have landed in nearby non-metro areas, such as Honda suppliers TS Tech Alabama in Boaz and KTH Leesburg Products, which recently expanded in Leesburg.

One of Alabama's most rural areas, Cullman County, located off Interstate 65 halfway between Birmingham and Huntsville, has been markedly successful in attracting auto suppliers. Topre, a first-tier Japanese metal stamping supplier recently joined other long-time auto companies that have prospered there. Topre supplies its parts to the Japanese version of the Big Three-Honda, Nissan and Toyota.

Why choose a rural area? As Dale Greer, project manager for Cullman Economic Development Agency explains. "Rural areas often have agricultural backgrounds and are filled with people who are mechanically inclined, trainable and accustomed to hard work. Our work ethic is great. Our community is supportive and helpful to business. All of these elements-along with a location in the center of the Southern Automotive Corridor-- make rural Alabama a smart choice for auto suppliers."