BBY Best Buy Company

By Paul Page 

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Best Buy Co. found itself in an unusual place for a retailer during the holidays: the electronics giant saw plenty of demand for electronics but the company couldn't keep its shelves stocked. The supply-chain letdown triggered a surprising drop in revenue, the WSJ's Khadeeja Safdar reports, and a warning that shortages may continue through the first half of this year. It's a setback for a retailer that's invested in e-commerce tools after losing customers in recent years to Amazon.com Inc. and other price-cutting web marketplaces. Best Buy has grown more nimble. But the new stumble highlights how retailers are getting caught between conflicting supply-chain demands: store owners are trying to keep inventories lean to keep costs down, but e-commerce sales have fractured many of the traditional forecasting tools retailers use to ensure the right goods are in the right place to meet sales demand.

While Foxconn Technology Group talks about starting manufacturing in the U.S. , the electronics giant is expanding its factory footprint in southern China. Foxconn Chairman Terry Gou pointed to the contrast as he launched construction of an $8.8 billion flat-panel screen factory in Guangzho, the WSJ's Eva Dou reports, highlighting the high stakes and breakneck growth pace in electronics supply chains. Foxconn has been talking for several years about a potential flat-panel factory in the U.S. but hasn't moved on the project. Any new factories carry extra weight for Foxconn as they advance company efforts to move beyond contract manufacturing and become more like Samsung Electronics Co., a consumer brand that makes components for itself and others. That would give Foxconn even greater weight in larger distribution channels, from parts to final delivery, and potentially make Foxconn's factories nodes in a more connected global network.

Harley-Davidson Inc.'s "hogs" are making noise in overseas markets. President Donald Trump pointed to the iconic motorcycle maker in his address to Congress this week as an American company finding it "very hard" to do business abroad. The WSJ's Sean McLain writes Harley-Davidson has been clearing trade barriers, however, including 100% tariffs in at least one market, and boasts of growing export business even as U.S. sales slip. Harley-Davidson gets about 40% of its sales outside the U.S., in part through nimble adjustments to meet both different customer demands and local regulations. In India, which erects tall bars to many overseas goods, the company has responded to tough duties and preferences for smaller machines by setting up assembly for the local market. In Japan, the company has tailored its bikes to the tough pollution and noise regulations. One dealer there says the barrier to growth isn't restrictive trade policy but an aging population that's simply less likely to hop on a Harley.

SUPPLY CHAIN STRATEGIES

The growing food-delivery market is getting a whopper-sized participant. McDonald's Corp. is testing home delivery in the U.S. and Europe, the WSJ's Julie Jargon reports, as the fast-food chain looks to meet its customers where more of them like to eat -- at home. The move is part of a broader strategic overhaul the company is undertaking, a response to a downturn in its business that will include returning to its fast-food roots. It's embracing new trends, however, by building on the rush toward food-delivery services that's being fueled by mobile commerce and increasingly sophisticated distribution operators. McDonald's says it's vast network carries a big advantage: About 75% of the U.S. population in its top five markets live within 3 miles of a McDonald's, the company says, allowing the company to give its customers what they want -- food that's fast and cheap.

Shipping a Kusama sculpture, it turns out, is something of an art. The opening of an exhibit of works by the Japanese artist Yayoi Kusama in New York this week caps an ambitious and intricate shipping operation, WSJ Logistics Report's Jennifer Smith writes, involving several transportation modes and some very, very delicate handling. That's because the centerpiece of the "Guidepost to the New World" exhibit is 11 cast-aluminum sculptures, one of them nine-feet tall, painted candy-apple red with the artist's signature polka dots and weighing more than a ton altogether. It's the kind of epic logistics effort growing more familiar in the contemporary-art world as galleries compete for the attention of global collectors. That's helping build a growing field of fine-arts logistics firms that specialize in moving and storing irreplaceable freight.

QUOTABLE

IN OTHER NEWS

Tanker operators Frontline Ltd. and DHT Holdings Ltd. will meet this month in an attempt to find common ground in Frontline's hostile takeover bid. (WSJ)

The ISM manufacturing index surged to its highest point since August 2014 and the New Orders index jumped more than five points to its highest level in more than four years. (WSJ)

An official gauge of manufacturing activity in China rose faster than expected in February. (WSJ)

U.S. inflation climbed 1.9% in January from the same month a year ago. (WSJ)

Lawmakers are criticizing a Trump administration proposal to circumvent the World Trade Organization by pursuing trade complaints through domestic U.S. law. (WSJ)

U.S. auto makers are discounting vehicles more aggressively amid swelling inventories. (WSJ)

General Motors Co. Chief Executive Mary Barra says tax proposals affecting U.S. imports could be "problematic" for the auto maker. (WSJ)

Lowe's Cos. issued an upbeat outlook after reporting that same-store sales rose 4.2% in its most recent quarter. (WSJ)

Dollar Tree Chief Executive Bob Sasser says the market for discount retail is "the most attractive sector" in a struggling industry. (WSJ)

Crocs Inc. is closing nearly a third of its stores after reporting that fourth-quarter sales fell 10%. (WSJ)

Hershey Co. plans to eliminate 15% of its global workforce over the next two years. (WSJ)

Women's apparel retailer BCBG Max Azria Group LLC filed for bankruptcy protection but has lined up financing to buy inventory and keep stores open. (WSJ)

Maersk Line restricted bookings from Europe to Asia and the Middle East under an apparent capacity crunch on the major shipping lanes. (The Loadstar)

Container ship owner Seaspan Corp. slashed its dividend after reporting that its fourth-quarter profit plummeted to $1.4 million. (American Shipper)

Freight forwarder Kuehne + Nagel AG's net profit rose 6% to $712 million in 2016 as growing ocean and air freight volume offset a 1.4% slip in overall revenue. (Lloyd's Loading List)

Navistar International completed its equity investment in Volkswagen Truck & Bus as part of a broader supply collaboration. (Commercial Carrier Journal)

Amazon's logistics operation in India is sharply cutting payouts to local stores that it uses to deliver orders. (Economic Times)

DHL is testing use of bicycles modified to carry two containers for "last-mile" urban delivery. (Logistics Manager)

Shipping line Nippon Yusen Kaisha Inc. sold all of its North American truck chassis to Direct ChassisLink Inc. (DC Velocity)

U.S. grocers face a shortage of salad greens following a late planting season in California. (NPR)

ABOUT US

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 and follow the WSJ Logistics Report on Twitter at @WSJLogistics.

Subscribe to this email newsletter by clicking here: http://on.wsj.com/Logisticsnewsletter .

Write to Paul Page at paul.page@wsj.com

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March 02, 2017 06:59 ET (11:59 GMT)

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