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Pitney Bowes is offloading its fulfillment division and a Kentucky warehouse as the shipping and mailing company seeks out more avenues to shed costs.
Fulfillment services and commerce enablement technology Stord acquired the segment from Pitney Bowes for an undisclosed sum.
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The deal expands Stord’s fulfillment network with a new 640,000-square-foot capacity facility in Hebron, Ky., marking the 11th location for the company in North America, and accompanies the firm’s recent expansion into Europe.
At the start of July, Pitney Bowes substantially increased the savings target for its cost rationalization program—escalating the goals from an initial range of $60 million to $100 million up to a range of $120 million to $160 million. A “meaningful” portion of these incremental savings will be realized over the remainder of 2024, while some initiatives will require efforts into 2025.
The sale of the fulfillment business at Pitney Bowes appears to be a result of the Connecticut-based company’s review of the future of its struggling Global Ecommerce (GEC) segment, which is the company’s business-to-consumer logistics services unit that has not brought in a profit since 2015. Pitney Bowes confirmed in a statement that the fulfillment services business “is a small piece” of the Global Ecommerce business.
Amid announcing the new cost savings goals, the shipping company said the expedited strategic review of alternatives for the GEC segment was in its “final stages.” A day after that announcement, the unit’s president, Gregg Zegras retired from the role. A company statement said existing personnel were expected to absorb the duties and responsibilities associated with Zegras’ position.
The GEC segment was a major point of contention for an activist investor last year in a board battle that ultimately ended in the departure of CEO Marc Lautenbach.
It only took seven months for Lautenbach’s interim replacement, Jason Dies, to follow suit, leading recently appointed board member Lance Rosenzweig in charge of the firm on an interim basis.
Pitney Bowes is still seeking a permanent CEO.
Wall Street initially liked the move when The Information first reported on the news Friday, with Pitney Bowes stock soaring more than 16 percent in after-hours trading. However, the stock fell back to earth during trading on Monday, plummeting 15 percent.