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GXO Logistics (GXO) on the Rise Since Expanded Abercrombie Deal

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Shares of GXO Logistics (GXO - Free Report) have had a good run on the bourses ever since this transportation company announced the expansion of its partnership with the renowned global specialty apparel and accessories retailer Abercrombie & Fitch (ANF - Free Report) . GXO shares have gained 2.5% since Jun 27.

Per the partnership, GXO Logistics will manage Abercrombie’s entire e-commerce operations, including returns in the U.K. from its newly refurbished facility just outside London, covering an impressive 170,000 square feet.

The newly established dedicated warehouse marks an exciting development for GXO, as stated by Gavin Williams, its managing director for U.K. and Ireland. Williams highlighted the benefits of bringing Abercrombie & Fitch to the U.K., emphasizing the utilization of GXO's Warehouse Management System to efficiently handle fulfillment and returns. The positioning of the stock closer to U.K. consumers will improve delivery and return processing speeds and simultaneously reduce the environmental impact.

Abercrombie & Fitch, specifically its adult apparel brand, aims to enhance its e-commerce offerings, increase service flexibility and mitigate inventory concentration by shifting its services to the U.K. GXO's current workforce of over 60 team members at the site provides picking, packing and sortation services using modular technology. GXO plans to substantially increase its workforce to meet ANF’s growth plans.

Additionally, GXO will employ its industry-leading reverse logistics solutions, ensuring returned items are processed within 48 hours of receipt. By maximizing the value of returned products through recovery and resale, GXO will reduce waste and generate significant cost savings. Furthermore, the company intends to implement goods-to-person automation and adaptive technology progressively to enhance operational efficiency and quality. The expanded partnership is expected to enhance speed and the overall omnichannel shopping experience for Abercrombie & Fitch's U.K. customers.

This move follows the successful collaboration in 2021 between GXO and Abercrombie in the United States, where the former operates a state-of-the-art distribution center equipped with advanced automation, robotics and intelligent analytics. Through that partnership, GXO made significant strides in strengthening its logistics capabilities. It opened a highly automated distribution center in Goodyear, AZ, spanning 715,000 square feet. This facility, serving as Abercrombie’s West Coast hub, incorporates hundreds of goods-to-person robots that efficiently process millions of items annually.

The advanced technology not only enhances productivity but also improves safety of team members. Moreover, GXO leverages intelligent analytics, including artificial intelligence and machine learning, to ensure fast and efficient product distribution to customers.

GXO's expanded partnership with Abercrombie in the U.K. marks a significant milestone in their long-term global collaboration. By leveraging its cutting-edge technologies and logistics expertise, GXO aims to enhance the e-commerce experiences for Abercrombie customers worldwide. GXO’s dedication to innovation, efficiency, and customer satisfaction positions it well in the contract logistics industry, solidifying its partnerships with renowned brands like Abercrombie.

Zacks Rank

GXO Logistics currently carries a Zacks Rank #3 (Hold), while Abercrombie currently sports a Zacks Rank #1 (Strong Buy).

A Top-Ranked Transportation Player

Investors interested in the Zacks Transportation sector may consider Copa Holdings (CPA - Free Report) , sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Copa Holdings is benefiting from an improvement in air travel demand. In first-quarter 2023, passenger revenues increased 28.5% from first-quarter 2019 levels due to higher yields.

CPA’s focus on its cargo segment is encouraging. In first-quarter 2023, cargo and mail revenues grew 51.8% from the first quarter of 2019 on higher cargo volumes and yields. Copa Holdings' fleet modernization and cost-management efforts are commendable as well. The Zacks Consensus Estimate for CPA’s current-year earnings has been revised 25.08% upward over the past 60 days.

Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.

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