Nike Retail Services, Inc.

Fleet-of-footwear NIKE, named for the Greek goddess of victory, is the world's #1 shoe and apparel company. NIKE designs, develops, and sells a variety of products and services to help in playing basketball and soccer (football), as well as in running, men's and women's training, and other action sports. Under its namesake brand, NIKE also markets sports-inspired products for children and various competitive and recreational activities, such as golf, tennis, and walking, and sportswear by Converse and Hurley. NIKE sells through more than 800-owned retail stores worldwide, an e-commerce site, and to thousands of retail accounts, independent distributors, and licensees. Chairman Philip Knight controls the company.

Geographic Reach

NIKE operates its business in North America (41% of sales), Western Europe (16%), Emerging Markets (15%), Greater China (10%), Central & Eastern Europe (5%), and Japan (3%). Its other business brings in the rest of its revenue.

Operations

NIKE's operations are divided among six geographic segments: North America, Western Europe, Central & Eastern Europe, Greater China, Japan, and Emerging Markets. Almost all of the company's branded footwear and apparel is made by third-party manufacturers outside of the US, mainly Vietnam, China, and Indonesia. Its equipment products are produced both in the US and abroad.

In fiscal 2013, sales in the US, including US sales of its Other Businesses unit, accounted for about 45% of total revenues. Converse and Hurley, its affiliate brands, and NIKE Golf comprise NIKE's Other Businesses. NIKE sells to thousands of US retail accounts, which includes a mix of footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts. During 2013, NIKE's three largest customers accounted for about 25% of US sales. About 87% of the manufacturer's US wholesale footwear shipments (excluding its Other Businesses) were made under the futures program.

Non-US sales for the behemoth brand, including non-US sales of its Other Businesses, generated 55% of total revenues. NIKE sells its products to retail accounts through its own Direct to Consumer operations and through a mix of independent distributors, licensees, and sales representatives worldwide. The company sells to thousands of retail accounts and operates 16 distribution centers overseas.

NIKE re-evaluated its long-term growth strategy in fiscal 2012 and, as a result, divested its Cole Haan and Umbro businesses in February 2013 and November 2012, respectively. NIKE sold Umbro to Iconix Brand Group for $225 million. The company sold Cole Haan to London-based private equity firm Apax Partners for $570 million.

Sales and Marketing

Worldwide, NIKE sells its products to retail accounts, through NIKE-owned retail stores and Internet websites, and through a mix of independent distributors and licensees. NIKE also sells its products to wholesale customers and directly to consumers through its Direct to Consumer operations. It also enters into licensing agreements that permit unaffiliated parties to make and sell certain apparel, digital devices and applications, and other equipment designed for sports activities.

NIKE markets its footwear and other products globally through diverse advertising and promotional programs and campaigns, including print, social media, online advertising, and endorsement contracts with celebrity athletes. In fiscal 2013 (ends May) the company spent more than $2.75 billion on advertising and promotions, up from about $2.61 billion the prior year. (Endorsement compensation totaled $264 million in 2013, down from $288 million in 2012.) The firm is known for its use of celebrity endorsers, including golfer Tiger Woods and quarterback Michael Vick, in its campaigns. In 2012 NIKE cut its ties to cyclist Lance Armstrong in the wake of a doping scandal.

During fiscal 2013, NIKE's three largest customers helped to bring in 25% of US sales. During the same reporting period, the company's three largest customers outside of the US accounted for some 6% of total non-US sales.

Financial Performance

During the past decade, NIKE's sales and earnings per share have grown 9% and 15%, respectively, on an annual compounded basis. Its return on invested capital has increased from 18% to 24% and its expanded gross margins by about 260 basis points.

In fiscal 2013 (ends May), results from continuing operations delivered consistent growth in revenues, earnings, and cash returns. To its benefit, NIKE in 2013 logged record revenues and earnings. Its revenues grew 5% to $25.3 billion, net income increased by 12% to $2.5 billion. NIKE attributes this growth to innovative performance and sportswear products, its efforts to incorporate proprietary technology platforms (such as NIKE Air, Lunar, Shox, FREE, Flywire, Dri-F.I.T, FlyKnit, NIKE +, and NIKE Fuel), its work to establish brand connections, its endorsements by high-profile athletes and teams (such as the NFL, FC Barcelona, and Michael Jordan), the company's high-impact marketing among global sporting events (such as the Olympics, European Football Championships, and the NBA Finals) and digital marketing, and its strength in category retail presentation online and through its namesake owned and retail partner stores.

Strategy

In addition to brand strength, NIKE has fueled momentum by launching a stream of new products, including the NIKE Fuelband, a digital device to track daily activity, and the Flyknit, a technology designed to lighten footwear weight and improve fit. In anticipation of replacing rival Reebok as the maker of NFL-branded apparel and uniforms, NIKE also expanded its offerings with new high-performance uniforms for all 32 NFL teams.

NIKE is led by Mark Parker, a longtime brand executive with the company, who was named president and CEO in 2006. Parker succeeded short-lived CEO Bill Perez, who replaced NIKE co-founder Philip Knight in 2005. 

Ownership

Co-founder and chairman Knight controls the company with nearly 76% of NIKE's Class A common stock.

▲ Show Less▼ Show Full Description


Nike Retail Services, Inc.


1 Sw Bowerman Dr
Beaverton, OR 97005-0979
Phone: 1 (503) 671-6453

STATS


  • Employer Type: Unknown
  • Director: Hilary Krane
  • Emea Retail Director: Stefan Laban
  • Director: Bernard Pliska

Major Office Locations

  • Beaverton, OR

Become a Vault Basic Member

Complete your Vault Profile and get seen by top employers