About 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 850-owned retail stores worldwide, an e-commerce site, and to thousands of retail accounts, independent distributors, and licensees.

Operations

NIKE's divides its operations 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 in Vietnam, China, and Indonesia. Its equipment products are made both in the US and abroad.

In fiscal 2014 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 include a mix of footwear stores; sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops; and other retail accounts. During 2014, NIKE's three largest customers accounted for about 25% of US sales.

Non-US sales for the behemoth brand, including non-US sales of its Other Businesses, generated roughly 55% of total revenues. NIKE sells its products to retail accounts through its own Direct to Consumer (DTC) 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.

Geographic Reach

NIKE operates through 110 sales offices and 110 administrative offices in North America (44% of sales), Western Europe (18%), Emerging Markets (14%), Greater China (9%), Central & Eastern Europe (5%), and Japan (3%). Other operations account for the rest of its revenue.

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 2014 (ends May) the company spent more than $3.03 billion on advertising and promotions, up from about $2.75 billion the prior year.

During fiscal 2014, NIKE's three largest customers helped to bring in 26% 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 13%, respectively, on an annual compounded basis. Its return on invested capital has increased from 22% to 25% and its expanded gross margins by about 180 basis points.

In fiscal 2014 (ends May), results from continuing operations delivered consistent growth in revenues, earnings, and cash returns. To its benefit, NIKE in 2014 logged milestone revenues and earnings. Its revenues grew 10% to $27.8 billion and net income increased 8% to $2.7 billion.

The historic growth for 2014 was fueled by sales increases across a number of markets, including North America (10%), Western Europe (19%), Central and Eastern Europe (13%), and Converse (16%). NIKE also attributed the growth to its Basketball, Sportswear, Running, and Football (Soccer) product lines.

The growth of NIKE footwear revenues for 2014 continued to be fueled by increased demand for performance products, including NIKE and Brand Jordan Basketball styles; Running models with NIKE Free, Air Max, Lunar, and FlyKnit technologies; and performance Football (Soccer) products. In addition, DTC revenues climbed by 2% from 2013 to 2014.

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 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.

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NIKE RETAIL SERVICES, INC.

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

Stats

  • Employer Type: Public
  • Director: Hilary K Krane
  • Director: Bernard F Pliska
  • Human Resources Business Partner M And S And Ihm: Bill Regan

Major Office Locations

  • Beaverton, OR

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