About Nike Retail Services, Inc.
NIKE, named for the Greek goddess of victory, is a shoe and apparel company. It designs, develops, and sells a variety of products 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; it also sells sportswear under the Converse. The company, which generates some 60% of sales outside the US, sells through more than 1,090-owned retail stores worldwide and an e-commerce site, and to thousands of retail accounts, independent distributors, licensees and sales representatives. Customer in North America accounts for about 40% of total revenue.
NIKE-branded products, which account for 95% of total revenue, are focused on six key categories: Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Training, and Sportswear (sports-inspired lifestyle products).
NIKE footwear is the company's leading product offering, bringing in more than 60% of sales and led by the iconic Jordan Brand and other collections. NIKE Apparel accounts for about 30% of sales and NIKE Equipment (bags, socks, sport balls, eyewear, timepieces, digital devices, bats, protective equipment and other equipment designed for sports activities) adds about 5%.
Converse and other brands contribute the remainder of revenue.
NIKE is based near Beaverton, Oregon; it has a 400-acre site with more than 40 buildings. It also has regional headquarters in Hilversum, the Netherlands (for the EMEA region) and Shanghai, China (for the Greater China region) and branch offices and subsidiaries in more than 50 other countries.
In the US, NIKE owns half a dozen significant distribution centers, four in Memphis, Tennessee, one in Dayton, Tennessee, and one in Indianapolis, Indiana. The most significant distribution facilities outside the US are located in Laakdal, Belgium; Taicang, China; Tomisato, Japan; and Incheon, Korea.
The company generates nearly 40% of sales in North America (mostly the US) with another quarter in Europe, the Middle East, and Africa. Greater China account for about 20% of revenue and some 15% for the rest of the Asia-Pacific region and Latin America.
Sales and Marketing
NIKE generates about two-thirds of sales from wholesale customers such as retail accounts (footwear and sporting goods stores; athletic specialty stores; department stores; skate, tennis, and golf shops), independent distributors, licensees, and sales representatives. It also sells directly to consumers through a strong global network of company-owned stores and its growing ecommerce site.
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. Total advertising and promotion expenseswere $3.6 billion, $3.8 billion and $3.6 billion for fiscal years 2020, 2019 and 2018, respectively.
NIKE's revenue has been consistently growing for a few years with the exception of 2020. Despite the minor decline on that year, NIKE's revenue has had an overall growth of 16% over the last five years. Its net income has climbed for three years, dropped in 2019, but bounced back in 2020.
In fiscal 2020 (ended May) the company reported revenue of $37.4 billion, down 4% from the prior year. It saw decline in all segments.
Net income, adjusted for non-cash items, generated $3.7 billion of operating cash inflow for fiscal 2020 compared to $5.3 billion for fiscal 2019. The decrease primarily reflects lower Net Income, resulting from the unfavorable impacts of COVID-19.
Cash at the end of fiscal 2020 was $8.3 billion, an increase of $3.9 billion from the prior year. Cash from operations contributed $2.5 billion to the coffers, while investing activities used $1 billion, mainly for capital expenditures. Financing activities provided another $2.5 billion from proceeds of borrowings.
NIKE's strategy is to achieve long-term revenue growth by creating innovative, "must-have" products, building deep personal consumer connections with its brands and delivering compelling consumer experiences through digital platforms and at retail.
Since fiscal 2018, through the Consumer Direct Offense and NIKE's Triple Double strategy, the company has focused on doubling the impact of innovation, increasing its speed and agility to market and growing its direct connections with consumers. In June 2020, the company announced a new digitally empowered phase of the Consumer Direct Offense strategy: Consumer Direct Acceleration.
On July 22, 2020, management announced a series of leadership and operating model changes to streamline and speed up strategic execution. These changes are expected to lead to a net loss of jobs, resulting in pre-tax, one-time employee termination costs of approximately $200 million to $250 million, which is expected to be incurred primarily during the first half of fiscal 2021, in the form of cash expenditures.
This next phase of NIKE's Consumer Direct Offense is expected to drive sustainable growth and profitability as the company accelerates NIKE to a digital-first company. The company is committed to the execution of this strategy, despite the short-term adverse impacts to business from a novel strain of coronavirus (COVID-19). As such, its long-term financial goals on average, per year, remain the same.
Phil Knight, a good miler, and Bill Bowerman, a track coach who tinkered with shoe designs, met at the University of Oregon in 1957. The two men formed Blue Ribbon Sports in 1962 in an effort to make quality American running shoes. The next year they began selling Tiger shoes, manufactured by Japanese shoe manufacturer Onitsuka Tiger. They sold the running shoes out of cars at track meets.
The company rebranded as NIKE in 1972, named for the Greek goddess of victory. The NIKE "Swoosh" logo was designed by a graduate student named Carolyn Davidson, who was paid $35. The same year NIKE broke with Onitsuka in a dispute over distribution rights.
It went public in 1980.
1 SW Bowerman Dr
Beaverton, OR 97005-0979
Phone: 1 (503) 671-6453
Employer Type: Privately Owned
Sec: John F Coburn
Business Systems Analyst Manager, Merchandising: Steve Fife-adams
Assistant To Ken Kosinski: Irina Stepanyants
Employees (This Location): 300
Employees (All Locations): 1,100
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