Nike Fights Deflated Sales -- WSJ
June 16 2017 - 3:02AM
Dow Jones News
By Sara Germano
Nike Inc. is cutting more than 1,000 global jobs as part of a
restructuring to help the sneaker giant battle slowing sales.
The company said Thursday that the layoffs would affect 2% of
its global workforce. The Beaverton, Ore., company employed more
than 70,000 around the world as of last May, including retail
staff.
Nike said the changes were part of a strategy to focus on key
markets, digital sales and fewer products. In recent quarters, the
company has reported slowing future orders for its products in its
North America market.
"We're getting even more aggressive in the digital marketplace,
targeting key markets and delivering product faster than ever,"
Chief Executive Mark Parker said.
Nike was forced to slash 1,750 jobs, including 500 at its Oregon
headquarters, during the 2009 recession. Since then, its global
workforce has more than doubled, not including its increased
reliance on contract workers, particularly at corporate
headquarters. Construction is under way to expand its Beaverton
campus, which currently houses more than 10,000 people.
But a shift to online shopping and the demise of traditional
sporting goods chains such as Sports Authority has pinched the
company and U.S. rival Under Armour Inc. Nike is also being
challenged by Adidas AG, which has recaptured some of the market
share it lost in past years.
In March, Nike gave a tepid outlook for sales growth this year,
citing competition in the U.S. market and a more promotional retail
environment. Overall, athletic footwear retail sales have fallen
about 1% to $5.4 billion this year through April, according to NPD
Group. Nike is expected to report its latest results on June
29.
Sales declines have hurt the lucrative basketball-shoe category,
which is dominated by Nike. Nike reduced the price for LeBron
James's signature shoes over several years from more than $200 a
pair to between $140 and $170. The company also introduced custom
kicks for Paul George and Kyrie Irving at more moderate price
points, between $100-$140.
As part of its restructuring, Nike said it would reduce its
geographic divisions from six to four: North America; Europe, the
Middle East and Africa; Greater China; and Asia Pacific and Latin
America. The company also said it would reduce its styles by 25% to
focus on its biggest franchises and help speed product
introductions.
Write to Sara Germano at sara.germano@wsj.com
(END) Dow Jones Newswires
June 16, 2017 02:47 ET (06:47 GMT)
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