By Paul Page
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Shopping mall owners facing the loss of big retailers are getting help from an unlikely arena -- e-commerce business. Some retailers are converting empty mall space into makeshift distribution centers for pickup and returns of goods bought online, the WSJ's Esther Fung and Jennifer Smith report, even as more online merchants are opening their own physical stores to reach more customers. Some retail centers, including those at town-center locations in smaller cities, are even housing Amazon Lockers, which allow customers of Amazon.com Inc. to pick up and return packages at their convenience. It's part of the changes that the surge in online shopping are imposing on the physical landscape in the retail world, where both online specialists and storefront operators are trying to match changing customer preferences to new distribution channels. Mall owners have been hard hit by the move to online sales, but the delivery strategies may bring relief to that troubled wing of the real estate market.
The Limited Stores Co.'s filing for bankruptcy protection marks a watershed for the retail industry. The company is going through a sale through bankruptcy that seeks to make The Limited the biggest merchant in several years to transform itself from brick-and-mortar business to online specialist, the WSJ's Lillian Rizzo and Peg Brickley report. The apparel retailer has at least one potential buyer lined up, an affiliate of Sycamore Partners that is bidding to take on the brand name and e-commerce assets. The company, once an icon of logistics for its international distribution operation, already closed its 250 stores this month, and joins a growing list of retailers that include American Apparel LLC, Aéropostale Inc. and Sports Authority Holdings Inc. that have been pushed into bankruptcy by changing consumer buying patterns. The filing also leaves several logistics providers as unsecured creditors, including Mast Global Logistics, United Parcel Service Inc., FedEx Corp. and TradeGlobal LLC.
The dying embers in railroad coal shipments may have some life in them. CSX Corp. says its top line grew 9.2% in the last quarter of 2016, the WSJ's Anne Steele reports, amid a small reprieve from plunging coal shipments. Thecompany's overall profit slipped to $458 million, but that was only slightly below the profit from a year ago, the latest signal that rail industry fortunes are recovering. Carriers have been cutting costs over the past couple of years, but CSX is also seeing gains in critical business lines. Coal shipments rose 8.3% in the quarter, which included an extra accounting week, and were up 2.8% even without those added days. That comes after a 2016 in which U.S. freight railroads saw their fewest coal carloads since the Association of American Railroads began tracking the figures in 1988. But overall industry coal loads were up year-over-year in December, and so were intermodal shipments, giving railroads some momentum heading into 2017.
ECONOMY & TRADE
Tough political talk about manufacturing has some companies looking to crunch the numbers behind moving production to the U.S. The studies in many cases are in their early stages, but theWSJ's Richard Teitelbaum reports the economic analyses are coming as an overhaul of the U.S. tax code looms and President-elect Donald Trump seems to be calling out big-name companies on a near-daily basis for plans to expand abroad. Fitbit Inc. has already met with a contractor that makes its fitness trackers, and contract manufacturer Flex Ltd., says it is getting requests to analyze the impact of moving factory work to the U.S. It's a complex equation that will involve labor, logistics, supplier relationships and changes in tax law that may not become clear for several months or longer. But for many businesses, the questions over supply chains are critical to their operating models, and they're not waiting to understand the impact.
Plans in Washington for so-called border adjustment may need adjustment. In a new twist in the increasingly heated debate over potential import taxes, President-elect Donald Trump criticized a cornerstone ofHouse Republicans' corporate-tax plan, the WSJ's Richard Rubin and Peter Nicholas report, throwing into doubt a measure pitched as an alternative to import tariffs. The idea would tax imports and exempt exports to encourage companies to locate jobs and production in the U.S. But Mr. Trump calls the idea "too complicated." That's potentially a big win for retailers and oil refiners who have warned the measure would force them to raise prices because they rely so heavily on imported goods. It also highlights the uncertainty that Mr. Trump's comments on manufacturing and imports are casting over businesses and policy makers. So far, he has cajoled and pressured companies. But the apparent divide between the incoming president and congressional allies underscores the challenge he'll face turning his agenda into law.
IN OTHER NEWS
Prime Minister Theresa May said the U.K. intends to leave the European Union's single market,a definitive break with the potential to reset trade and supply chains for a broad range of businesses. (WSJ)
General Motors Co. confirmed it will invest an extra $1 billion in its U.S. manufacturing and bring in-house some production now being done by a supplier in Mexico. (WSJ)
Hyundai Motor Co. plans to invest up to $3.1 billion in its existing U.S. manufacturing facilities and may build another plant in the country. (WSJ)
Several business groups and companies want the incoming Trump administration to salvage and renegotiate the Trans-Pacific Partnership trade deal. (WSJ)
Wal-Mart Stores Inc., the largest U.S. importer by shipping container volume, says it plans to create about 10,000 U.S. jobs this year. (WSJ)
The dollar fell to a one-month low following Mr. Trump's remarks that it is "too strong." (WSJ)
A rush by Chinese investors into copper is fueling a sharp rise in prices for the industrial commodity.(WSJ)
A U.K. court approved an agreement between Rolls-Royce Holdings PLC and Britain's Serious Fraud Office to settle a four-year corruption investigation. (WSJ)
Shipbroker Braemar ACM says 35 container ships have already been sent for scrapping so far this year. (The Loadstar)
Hapag-Lloyd AG will raise $159 million through a bond sale to pay early redemption of notes due this fall and other purposes. (American Shipper)
Less than a third of North American shoppers in a survey say buying goods online and picking them up in stores works smoothly. (Internet Retailer)
Trucking lobbyists want the Republican-controlled U.S. Congress to bar enforcement of state laws on driver work rules. (Commercial Carrier Journal)
Japanese companies are shipping more goods on railroads in part because of a chronic shortage of truck drivers. (Japan Times)
A cold snap in Europe has left the U.K. with a vegetable shortage, including depleted zucchini supplies. (Evening Standard)
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.
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(END) Dow Jones Newswires
January 18, 2017 06:43 ET (11:43 GMT)
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