Sign up: With one click, get this newsletter delivered to your inbox.
Continue Reading Below
Bigger may no longer be better in the troubled world of consumer-goods suppliers. Reckitt Benckiser Group PLC, one of the world's biggest suppliers of retail brands, is splitting the business into two divisions, the WSJ's Saabira Chaudhuri writes, reasoning that tighter focus is more important than scale for products like Lysol, Woolite and Mead Johnson baby food. Splitting the business into home-and-hygiene products and consumer-health goods makes Reckitt the latest supplier to act amid stalling sales as consumer tastes in many key markets change fast. Shoppers are gravitating toward smaller, local products and away from mega-brands. Reckitt CEO Rakesh Kapoor says "channels have changed," undercutting the scale advantage they've had in distribution. Reckitt's separate divisions will share functions such as procurement. Still, the split positions the business for potentially more drastic action, and analysts are already looking for bigger moves.
Mitsubishi Motors Corp. plans to build its way into a bigger share of the global automotive market. The Japanese auto maker will spend $5 billion over the next three years building new factories and developing new cars, including electric vehicles, the WSJ's Sean McLain reports, as it looks to expand sales in areas such as China and restore profitability after a fuel-economy scandal. Mitsubishi Motors is investing in its supply chain in part with the help of Nissan Motor Co., which took a controlling stake in the company about a year ago and also struck a cooperation pact with France's Renault SA. The alliance is part of the broader move by small car makers to team up for scale in auto manufacturing and sales competition that's grown more global. Meeting goals of boosting sales by more than 30% in the next three years and doubling sales in China would give Mitsubishi Motors a bigger role in that competition, and in the industry's move toward electric cars.
U.S. officials plan to test whether state, local and federal rules for drones can share the same airspace. They're preparing to release a model program aimed at easing the regulatory logjam around commercial use of drones, the WSJ's Andy Pasztor writes, by linking Federal Aviation Administration rules to those of local governments, including law enforcement agencies. It's an effort that may seem more complicated than the technology behind the unmanned aircraft because the regulations have to be tied to the communications systems of drones while they're in fast-moving operations. The basic idea is to have the FAA oversee commercial drone operations between 200 feet and 400 feet in designated test areas, with drones at lower altitudes primarily regulated by states, counties or localities. Businesses including parcel carriers are anxious to get things moving. But the drone-safety debate has heated up lately amid reports of collisions involving drones in the U.S. and Canada.
SUPPLY CHAIN STRATEGIES
Retailer Supreme is carving out a bigger role in apparel by turning traditional inventory and distribution strategy upside down. The underground streetwear brand has just 11 stores yet is valued at more than teen retailer Abercrombie & Fitch Co. and its global network of 900 outlets. The WSJ's Khadeeja Safdar reports that it's limited distribution is its virtue as it builds a following based on the scarcity of its products. The seller of skateboarding T-shirts, hats and sweatshirts has tapped into the zeitgeist of teens seeking hard-to-get looks that run counter to the mass-produced goods that fill big industrial supply chains. The recent sale of a roughly 50% stake to private-equity firm Carlyle Group LP for about $500 million highlights questions about its strategy, including whether a brand built by limiting distribution can generate adequate growth. Supreme will likely come under pressure to trade its carefully-cultivated scarcity for higher volume, which risks making its supply chain and its clothing look like those of troubled retailers.
Continue Reading Below
IN OTHER NEWS
Economic activity grew at a measured pace across the U.S. in September and October, according to the Federal Reserve. (WSJ)
U.S. housing starts fell last month for the fifth time in six months amid hurricane-related shortages in labor and construction materials. (WSJ)
Canadian factory sales rebounded in August, rising 1.6% on strong auto demand and higher energy prices. (WSJ)
Blue Apron Holdings Inc. is laying off around 300 employees, including fulfillment center staff. (WSJ)
EBay Inc.'s third-quarter profit jumped 25% to $523 million on an 8% gain in gross merchandise volume. (WSJ)
TPG Capital hired former Ford Motor Co. chief executive Mark Field as an adviser as it moves to expand supply chain-related investments. (WSJ)
Delta Air Lines Inc. says it plans to take delivery of new Bombardier Inc. jetliners built at an Airbus SE facility in Alabama. (WSJ)
Qualcomm Inc.'s $39 billion acquisition of NXP Semiconductors is set to close by the end of the year, paving the way for the chip maker to be a major player in autonomous driving. (WSJ)
Private-equity group EQT will buy a medical-device maker Clinical Innovations for about $250 million. (WSJ)
JD.com will merge membership and fulfillment systems with Wal-Mart Stores Inc. in China, including use of the U.S. retailer's inventory to fill online orders. (Nikkei Asian Review)
Canadian Pacific Railway Ltd.'s third-quarter net profit jumped 47% despite declining auto and grain shipments. (The Globe and Mail)
Trucker YRC Worldwide Inc. lowered its 2017 financial outlook in part because of the impact of hurricanes on operations. (Reuters)
Global container throughput at ports is on track to grow 6.1% this year, the fastest pace since 2011, according to Alphaliner. (Lloyd's List)
Cargo tonnage moving through the expanded Panama Canal rose 22.2% in the fiscal year that ended Sept. 30, reaching a record. (Seatrade-Maritime)
Foxconn Technology Group and venture firm IDG Capital will raise $1.5 billion to fund startups in automotive technologies. (South China Morning Post)
Indian refineries are exploring purchases of U.S. crude that would open a new export market for American producers. (MarineLink)
China's state-owned CITIC Group will take a controlling stake in Myanmar's Kyauk Pyu seaport. (Deal Street Asia)
Third-quarter net profit at India's Blue Dart Express fell 3% as rising expenses offset revenue growth. (Economic Times)
Amazon will take over the top six floors of the Macy's Inc. Seattle store for office space. (Seattle Times)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at firstname.lastname@example.org
(END) Dow Jones Newswires
October 19, 2017 07:14 ET (11:14 GMT)