Nike Forms Supply-Chain Pact With Apollo -- Update
August 18 2016 - 8:14PM
Dow Jones News
By Josh Beckerman
Nike Inc., which has struggled with logistics issues recently,
said it has formed a supply-chain partnership with private-equity
firm Apollo Global Management LLC.
Under the alliance, a new apparel supply chain company has
purchased existing Nike apparel suppliers in North and Central
America and will buy more to "create a more vertically integrated
apparel ecosystem." The new business has purchased apparel maker
New Holland as well as embellishment, warehousing and logistics
business ArtFX.
Financial terms weren't disclosed, but Nike said it hasn't made
a capital investment in the entity.
According to a timeline posted on New Holland's website, the
Pennsylvania company had more than 9,000 employees as of 2014. It
has factories in Honduras and Nicaragua and ended U.S. production
in 2001.
Nike's logistics issues have included complaints by some
retailers of product delays in 2015. Nike opened a
2.8-million-square-foot distribution center in Memphis in June
2015.
The company's other recent supply-chain-focused moves have
included a partnership with Flextronics International Ltd. on areas
like automation and customization. In May, Nike expanded its
European Logistics Campus in Belgium to "accelerate the company's
drive toward the supply chain of the future."
Nike said in June that revenue rose 6% to $8.24 billion for the
quarter ended May 31, while analysts polled by Thomson Reuters
expected $8.28 billion. Sales were flat in North America, as the
company continued to clear excess inventory and battled increased
competition from Under Armour Inc. and Adidas AG.
Shares of Nike, down 8.5% this year, closed up 35 cents to
$57.21 on Thursday. Shares rose another 14 cents after hours.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
August 18, 2016 19:59 ET (23:59 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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