Today's Top Supply Chain and Logistics News From WSJ

Features Dow Jones Newswires

ByImani Moise

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The U.K. is emerging as a test case for whether globalized supply chains may be undercutting long-held assumptions about the impact of exchange rates on trade. Conventional wisdom holds that suddenly weaker currencies spur growth by making a country's exports more competitive on the global stage. But nearly a year after the Brexit vote sent the British pound into free fall, U.K. businesses are finding that higher costs for overseas components and materials have erased much of that advantage, WSJ's Christopher Whittall and Mike Bird report. That's because much of the U.K.'s shrinking manufacturing sector no longer relies on domestic supply chains for components. While consumers abroad have been buying more British products, rising import volumes and higher purchasing costs for raw materials and parts have blunted that impact.

England's nascent wine industry has a Brexit hangover. The fall in the pound means U.K. vineyards have to absorb higher costs for vines and equipment such as fermenting tanks, which usually come from France or other eurozone countries where winemaking is more established, WSJ's Laurence Fletcher and Tapan Panchal write. While British wine is now cheaper to export and sell abroad, winemakers say rising import costs have eaten away at margins, offsetting any gain from cheaper prices. English wine is also mostly sold domestically, unlike Scottish whiskey, which has a broad global market and has seen exports rise over the past year. What's more, English drinkers aren't readily willing to give up their beloved and thoroughly French Champagne.

Count slow and expensive logistics among the hurdles in Africa that have many companies rethinking their growth plans on the continent. International brands and South African retail heavyweights alike have struggled to grow after investing heavily in Africa a few years back, WSJ's Alexandra Wexler writes. Sliding commodity prices have shaken local economies, and unemployment and inflation have eaten into consumer purchasing power. Wal-Mart Stores Inc.'s Massmart Holdings Ltd. has been slow to open stores, while Woolworths Holdings Ltd. has pulled out of Nigeria, Africa's largest economy. Steinhoff International Holdings NV, the home-furnishings chain known as "Africa's IKEA," plans to spin off a separate listing of its African businesses, some of which were battered by falling currencies. One of Steinhoff's brands, discount retailer Pepkor, found success in Africa by focusing on no-frills stores, selling products often made in China then trucked over 2,000 miles to specific markets.

SUPPLY CHAIN STRATEGIES

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Gymboree won approval for a bankruptcy loan to fund future inventory orders Monday, after declining earnings and maturing debts pushed the children's apparel retailer into Chapter 11. The retailer's survival strategy involves paying suppliers deemed "critical" to Gymboree's continued survival, although unsecured creditors are offered nothing. Without access to the loan, Gymboree says it wouldn't have enough liquidity to place new orders and would have to liquidate the chain sooner than later, WSJ's Lillian Rizzo and Peg Brickley write. Gymboree could close as many as 450 stores to free up capital to support its online selling effort. The company joins the parade of mall-based retailers seeking protection this year as increased spending online has pushed down both foot traffic and sales in stores.

QUOTABLE

IN OTHER NEWS

The deaths of three workers on an offshore drill rig raised concerns that the oil industry is cutting costs at the expense of safety. (WSJ)

The new leader of General Electric Co., John Flannery, brings a private-equity perspective to the industrial conglomerate. (WSJ)

Tight credit conditions and balance-sheet vulnerabilities could account for up to one-third of the productivity slowdown in advanced economies. (WSJ)

Jaguar Land Rover is the latest automaker to pair up with Lyft Inc. with a deal for collaboration on self-driving cars and other mobility services. (WSJ)

German discount grocery store Aldi is planning a 900-store expansion into the U.S. (WSJ)

Mall landlords are leasing space to non-store tenants, including churches and corporations such as Ford Motor Co., as retailers close doors at a record pace. (WSJ)

The U.S. Supreme Court declined to hear a suit by an owner-operator trucker challenging a federal rule requiring electronic logging devices. (Commercial Carrier Journal)

Qatar has started shipping cargo through Oman to bypass Gulf countries that have cut off sea routes to the energy-rich nation. (Associated Press)

Mexico's antitrust regulators fined major car-carrying shipping operators for colluding on routes in the auto logistics market. (Reuters)

Cosco Shipping Ports is buying a majority stake in Spain's Noatum Ports, which operates facilities in Valencia and Bilboa, as well as rail terminals in Madrid and Zaragoza. (Lloyd's List)

Gap Inc. will invest another $41.7 million and add more than 500 more jobs to expand its distribution center in Gallatin, Tenn. (Chattanooga Times-Free Press)

Japan Post Holdings will ease up on acquisitions after its troubled buy of Australian logistics operator Toll Holdings. (Nikkei Asian Review)

Singapore Post will start using digital technology and a smartphone app to deliver registered mail, SmartPac and other trackable postal items. (Channel News Asia)

ABOUT US

Imani Moise is a reporter for WSJ Logistics Report. Follow her at @moisenoise, and follow the entire WSJ Logistics Report team: @brianjbaskin , @PaulPage, @jensmithWSJ and @EEPhillips_WSJ and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

(END) Dow Jones Newswires

June 13, 2017 06:47 ET (10:47 GMT)