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Nike's Wholesale Turnaround; Levi's Going Direct; China's Mega Shipyards By Paul Page
Nike's new supply chain is looking more like the supply chain that helped build the business into a sports apparel trend-setter. The company is unwinding key parts of the strategy that it undertook during the pandemic, when it cut ties with some longtime retail partners and tried selling more merchandise directly to consumers. The WSJ's Inti Pacheco reports that Nike now is embracing its role as a wholesale supplier and asking some of those stores for help clearing out its overstuffed warehouses. Nike's experience highlights the high risks that big suppliers take on when pushing into the direct-to-consumer trade. Selling directly to consumers increased the company's liabilities, including by shifting storage and shipping costs from wholesalers to Nike. But company insiders say that in its zeal to boost digital sales, the company grew cautious and veered from its cutting-edge roots, opening itself to competition from newcomers.
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Supply Chain Strategies
Levi Strauss believes the benefits of direct-to-consumer strategy outweigh the supply chain risks. The jeans maker is leaning into stand-alone stores as part of a broader effort aimed at "rewiring the company." Chief Financial and Growth Officer Harmit Singh tells the WSJ's Jennifer Williams that the goal is to speed up delivery of new products by leveraging the insight it gets on consumer buying trends through its direct sales channels. The brand, which historically has been propped up by sales through wholesalers, plans for the direct-to-consumer business to account for more than 55% of revenue by 2027. The direct sales also cut out uncertainty as wholesale customers, mainly department stores such as Macy's and Kohl's, have suffered from falling foot traffic. The approach is a tradeoff, experts say, between the higher risks and capital investment that stores require and the potentially stronger margins and closer connections to shoppers.
Lululemon is shutting a Sumner, Wash., distribution center and consolidating operations at a larger Southern California site. (CNBC) Quotable Manufacturing
In 2023, more than half of the world's commercial shipbuilding came from China. In fact, a single shipyard outside Shanghai has more shipbuilding capacity than the entire U.S. naval shipbuilding industry, presenting a potential national security problem. In a video report , the WSJ looks at the strategies that led to this growth and where the U.S. stands as maritime competition ramps up.
Number of the Day In Other News
Honda is nearing a deal to assemble electric vehicles and components in Ontario, Canada. (WSJ)
Kroger and Albertsons will sell more than 160 additional stores under a plan aimed at appeasing competition regulators and closing their merger. (WSJ)
Apparel retailer Express filed for chapter 11 bankruptcy with plans to shutter a raft of stores and sell the bulk of its remaining locations and operations. (WSJ)
South Korea's exports jumped 11.1% in April , boosted by surging semiconductor and automotive shipments. (Bloomberg)
Russia's Norilsk Nickel will move some copper smelting production from the country to China to cope with the impact of sanctions. (Financial Times)
Russian state-owned tanker operator Sovcomflot's profits more than doubled last year to $942 million. (TradeWinds)
Authorities in Baltimore opened a third temporary shipping channel at the site of the Key Bridge collapse. $(WBAL)$
The U.K. will provide about $9.9 million to study smart shipping technologies including artificial intelligence. (Splash 247)
Scott Wine stepped down as CEO of CNH and the farm equipment maker named Gerrit Marx , CEO of truck manufacturer Iveco, as his replacement. (Barron's)
British authorities granted workers at an Amazon warehouse in Coventry the right to vote on unionization. (The Guardian)
Online fast-fashion retailer Shein will work with freight forwarder Flexport to offer end-to-end logistics services . (Chain Store Age)
A sustainability group says garments certified by Better Cotton came from deforested land and were sold by H&M and Inditex. (Retail Dive)
Truckload carrier P.A.M. Transportation swung to a $700,000 operating loss in the first quarter as revenue fell 17.6%. (Trucking Dive)
About Us
Paul Page is editor of WSJ Logistics Report. Reach him at [paul.page@wsj.com].
Follow the WSJ Logistics Report team: @PaulPage , @bylizyoung and @pdberger . Follow the WSJ Logistics Report on X at @WSJLogistics .
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
April 23, 2024 07:07 ET (11:07 GMT)
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