Hillwood Antes Up Cash, Expertise and Maybe Space for iFulfillment Operation

FT. WORTH-Hillwood is poised to put up equity, real estate expertise and a prime spot at Alliance to Chicago-based iFulfillment Inc., an IT retail logistics provider. Jonas Woods, Hillwood’s executive vice president and president of Hillwood Ventures, says the pairing has triggered talks for a possible 500,000-sf high-tech operation in Alliance’s Gateway or Westport corridors. “We think Alliance is perfectly suited to this type of project,” Woods tells GlobeSt.com. The goal is to seal a deal on an Alliance site in first quarter 2001. It’s also possible that the IT fulfillment operator for such brands as Nordstrom’s and Golden Books could be housed with an existing Alliance company, one such as FedEx where a mail-handling system already is in place, he says.

If an Alliance deal is consummated, the location hinges on iFulfillment’s transportation mode, says Woods. Westport is located in Alliance’s intermodal yard, a facility anchored by the Burlington Northern Santa Fe whereas Gateway is tailored for over-the-road transports. At present, most of iFulfillment’s incoming goods from its half dozen clients are primarily shipped by truck, with a small parcel service used for the outgoing packages, Jeff Woods, iFulfillment’s vice president of strategy, tells GlobeSt.com.

Woods of iFulfillment is declining to discuss specifics of an Alliance location, but did say that another high-tech logistics facility is in the offing for the fledgling firm, which had opened a 350,000-sf industrial site in June in Bolingbrook, IL. That site currently employs about 80, but has a maximum capacity for 400 to 500 workers.

Any decision for new distribution sites, iFulfillment’s Woods stresses, will be the outcome of ongoing negotiations with dozens of prospective clients for its e-fulfillment trade. “It could be located in one city or concentrated in a few cities,” he says of 2001 real estate plans for the firm that is now shipping thousands of parcels per day to consumers for its big name retailers. The fulfillment service uses a high-tech “pick, pack and ship” system of racks, conveyors and sorters to help bridge the gap between consumers and their choice for point of sales, be they bricks and mortar, catalogs or the Internet.

Hillwood’s Woods says his firm’s financial and real estate support aren’t rooted in just an Alliance deal. “We are focused on their real estate needs wherever they are,” emphasizes Woods. “It’s our hopes that they will need several types of facilities… but we’re certainly making an argument for Alliance.”

The pairing, says Hillwood chairman Ross Perot Jr., “enhances our position as one of the nation’s premier developers of e-commerce distribution centers.” But, iFulfillment is the real gainer with doors now open to Hillwood’s reservoir of land and space, totaling more than 25,000 acres and eight million sf of industrial, office and retail space between Atlanta and Hawaii. And then, there’s the financial backing from Hillwood’s RailGun Ventures. Hillwood is so convinced of the firm’s ability to capture its market, nationally and globally, that it has taken an equity stake in the operation.

The agreement also makes it possible for iFulfillment to secure contracts to acquire or run clients’ existing facilities. Chris Snag, iFulfillment’s chairman and CEO, says e-commerce trade has reached a point where it’s critical for businesses to “re-evaluate and re-define” distribution strategies.