Fashion giants: the branching out of distribution centers
With the phenomena of internationalization, large companies, especially the giants in the retail fashion sector, put in operation strategies that allow them to reach their customers with ease and at a faster pace. Various companies that operate globally branch out of their countries to comply with the demands of their clients and for that to happen, products require to be in stores or at proximity hubs to be delivered in the case of online operations. Where do most of these companies such as Nike, H&M, Inditex, Gap and many more settle for such operations? reach the store as quickly as possible
The Spanish Inditex group, the leader in fashion distribution by revenue, has ten logistic centers which allow a maximum delivery time of 48 hours. The fast-fashion retailer that operates locally and distributes globally has all of its hubs situated in Spain. In order for the group to complete its operations efficiently, it uses “the latest technology and software designed by our expert in-house teams,” as stated on the Inditex webpage.
Add revue and fiscal year results.
The American giant of sport and shoe wear, Nike, has six significant distribution centers in the United States, of which, four are in Memphis, Tennessee, two are owned and the other two are leased. Another two distribution centers, one of which is situated in Indianapolis, Indiana and the other in Dayton Tennessee are both leased and operated by third-party logistics providers. Additionally, the apparel and equipment of the company are also shipped from their Foothill Ranch, the Californian distribution center that Nike leases. Other smaller and third-party leased, along with operated distribution facilities are located in various parts of the United States. According to the company’s report for the fiscal year 2019, Nike operates with 67 distribution centers outside of the United States.
The US fashion distribution company, Gap states that most of its stores’ premises and distribution centers are leased. The parent company of Old Navy approximately leases 1.2 million square feet of distribution space located in Shanghai, China, Phoenix, Arizona: and Erlanger and Hebron, Kentucky. Third-party logistics companies provide logistics services to Gap through distribution warehouses in Chiba, Japan, and Shanghai and Hong Kong, China.
The American company doesn’t specify the total number of its logistics centers it has in a whole nor does it detail the specifics of its operations in the US.
Climate-smart delivery options – H&M customers in the Netherlands can opt to receive and return items by a bicycle delivery service, a solution that is much appreciated by customers. Combined with using biogas vehicles from the logistics center, this reduces CO2 emissions. It is planned to roll this out to additional markets in 2020
The Japanese group, although it doesn’t provide a list of its logistics centers it does, however, divulge the progress of its logistic reform. The retail giant launched a program two years ago called “Ariake Project”, a form of digitalization transformation, which allows the company to minimize certain aspects in its structure including overhauling their logistics.
The Japanese company is in partnership with the logistics firm Daifuku group, a company that allows them to equip their Ariake warehouse (automated warehouse dedicated to online sales).
Tadashi Yanai, the CEO of the group, states that he want to invest “¥100 billion to accelerate the introduction of automated warehouses at all Fast Retailing global logistics centers.” Fast retailing is looking to establish these automated warehouses in Western Japan, China, the East and West Coasts of the United States and Southeast Asia, which may suggest that this is where the current warehouses of the companies that yet automated are located.
The American group does not specify the amount of distribution center it holds. The group that owns brands such as Calvin Klein, Tommy Hilfiger, Van Heusen, and many more, operate with a network of wholesale and retail distribution centers that they believe “has sufficient capacity to accommodate planned growth, as well as additional brands,” that they may license or acquire, explains the company on the webpage.
The Irish retailer Primark that operates in 28 countries does disclose the location of its distribution center, however, the company has various suppliers across the globe with around 1,003 factories with which it operates.
As for the American group, VF, which specializes in apparel and footwear discloses that it operates with 40 distribution centers, without specifying where the centers in question are located. However, the group details that most of the distribution centers are operated by VF. VF owns companies such as Timberland, Vans, The North Face, among others.
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