Sign up:With one click, get this newsletter delivered to your inbox.
Continue Reading Below
The rapid-fire supply chain strategy Spain's Zara used to build its business is helping the fast-fashion icon defy gravity in a turbulent retail market. The company's parent, Inditex SA, saw an 18% surge in net profit in its recent quarter and a 14% jump in sales, a sharp contrast with the major retrenchment American companies including Gap Inc., J. Crew Group Inc. and Nordstrom Inc. are undergoing as shopping patterns change. The streamlined production system that has allowed Zara to outpace rivals is now giving it a powerful platform to succeed online, the WSJ's Jeannette Neumann reports. The company makes 60% of its garments in Spain and nearby countries, gaining quick response on consumer trends and using Spain-based logistics centers that it leverages to constantly refresh its stores with small batches of new designs. The strategy has been a boon for its online business, feeding steady updates to web shoppers even as other retailers struggle to build a digital presence alongside traditional stores.
Nike Inc. is trying to move faster. The sportswear giant is resetting its strategy to focus on key markets, digital sales and fewer products as it adjusts to online shopping trends that are changing the relationship between suppliers and traditional retail outlets. The WSJ's Sara Germano reports Nike has seen its future orders tumble in recent quarters as traditional sporting goods chains such as Sports Authority have stumbled. One immediate impact of the strategy: Nike will cut its global workforce by about 2%, or 1,000 jobs, retrenching for the first time since the recession. CEO Mark Parker says the company is now "delivering product faster than ever," and will speed things up even more. To do that, Nike will slash its styles by 25% to focus on its biggest franchises, which will help streamline operations at the front end of the company's sprawling global supply chain.
U.S. grocers are coming under fresh pressure as consumers and discount rivals build new supply chains outside traditional distribution networks. Grocery behemoth Kroger Co. sent a shockwave through the industry with its new warning that intensifying competition would further cut into earnings this year, and the WSJ's Annie Gasparro writes the company's troubles are part of the larger trends that are roiling the business. Consumers are shopping for more of their groceries outside of traditional supermarkets. Online merchants, discounters and meal-kit delivery services all are cutting into grocers' market share. Food and beverage sales at brick-and-mortar stores in the U.S. were down nearly $3 billion in the first quarter from a year earlier. And a new wave of discount grocers is pushing into the arena, with Germany-based chains Lidl and Aldi both investing heavily. With margins already thin and sales slowing, traditional grocers are trying to find a response in a market that's changing at a rapid pace.
China's dominant hold on global rare earths supplies may soon extend into the U.S. A failed bidder for the Mountain Pass rare earths mine, the sole U.S. source of elements essential to electronics devices, says he'll challenge a bankruptcy auction that would deliver the mine to a buyout group backed by a Chinese company. With a bid of $20.5 million, two U.S. investment firms were selected to take control of Mountain Pass, along with China's Leshan Shenghe Rare Earth Shareholding Co., the WSJ's Peg Brickley reports. China controls most of the global supply of rare earths, elements used in small amounts in electronics, from cells phones to weapons systems. Rival bidder Tom Clarke, a Virginia entrepreneur is drumming on the national security implications of the deal. He says he has lined up international allies to revive a mine that boomed when Chinese trade policy crimped the world supply but failed when policies changed and prices fell.
Continue Reading Below
IN OTHER NEWS
U.S. manufacturing output fell 0.4% in May from a postrecession high the month before. (WSJ)
Mexico's peso is trading at its strongest levels in more than a year, as both domestic and external risks to the currency recede. (WSJ
Canadian manufacturing sales increased in April at their fastest pace in four months. (WSJ)
Nestlé SA is considering selling its U.S. confectionery business, as packaged-food giants struggle to accommodate changing consumer tastes. (WSJ)
French oil-services company CGG Group filed for bankruptcy protection after reaching a restructuring deal that will eliminate about $2 billion in debt. (WSJ)
Some truck drivers and warehouse workers serving the ports of Los Angeles and Long Beach plan to strike starting Monday. (Los Angeles Times)
Optimism among U.S. trucking executives is giving way to a restrained outlook amid tepid "choppy" shipping demand. (Logistics Management)
The temporary shutdown of the Port of Charleston over a bomb scare began with a call from a social media conspiracy theorist. ( New York Times)
The latest round of layoffs at Sears Holding Corp. includes the president and other senior executives at the retailer's online operation. (Internet Retailer)
Investment group Jefferies forecast that Maersk Line will improve its profitability by $2 billion this year, twice the carrier's own projection. (Shipping Watch)
United Parcel Service Inc. plans to open a $260 million shipping hub in Plainfield, Ind., by 2019. (WFYI)
Orders for new dry bulk shipping vessels in May reached the highest level in 14 months. (Lloyd's List)
Kellogg is dropping its direct-store delivery distribution operation and shifting to a warehouse fulfillment model. (Business Journals)
Supply Chain Solutions will launch a cargo operation across Lake Michigan from Milwaukee to Indiana under a designated "marine highway" program. (Northwest Indiana Times)
Florida-based regional cargo airline Amerijet will start trans-Atlantic service in 2018, with twice-weekly freighter flights to Brussels. (Air Cargo World)
U.S. rail shipments of petroleum and petroleum products fell 11.3% in the past week. (Railway Age)
Brazil reported record exports of finished vehicles in May. (Automotive Logistics)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin , @jensmithWSJand @EEPhillips_WSJand follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at firstname.lastname@example.org
(END) Dow Jones Newswires
June 16, 2017 06:31 ET (10:31 GMT)