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NIKE INVENTORY HAS TROUBLE KEEPING PACE WITH DEMAND
Published September 20, 1994
Demand for Nike products "is overwhelming inventory, reducing net income," reports Richard Reed in this morning's PORTLAND OREGONIAN. "It's a headache that just won't quit. Worldwide orders for Nike athletic footwear and apparel scheduled for delivery between now and January total $1.66B -- up 28 percent over the same period last year, when U.S. orders were depressed." But, U.S. inventory is down 46% from '93, leaving just 5.5M pairs of shoes, while global inventories are down 26%. Nike's 1st-quarter net income fell from $114.1M in '93 to $106M this year, but global revenues increased 6 percent to a record high of $1.17B (Richard Reed, PORTLAND OREGONIAN, 9/19). REAX FROM THE TOP: Nike Chair Philip Knight: "Last year at this time, media and investment sources were sounding the death knell of branded athletic footwear. Our U.S. results should give investors great confidence in the resiliency of the Nike brand and in our ability to lead the market with innovative products." Nike President Thomas Clarke: "The magnitude of the orders really reflects the continued strength of the Nike brand, but I also think it reflects of the athletic footwear industry around the world" (PORTLAND OREGONIAN, 9/19). DOMESTIC AND INTERNATIONAL STATS: U.S. revenues during the 1st-quarter of this year grew 55% in outdoor shoes; 31% in walking; 27% in tennis; 17% in cross-training; and 11% in running. Basketball shoes sales declined 14%, "but Nike executives said that orders were up again in that category." International revenues jumped 13% overall, but dropped 34% in France and 28% in Germany. Knight: "We are making progress in ... those countries, but tangible benefits may not be realized until fiscal 1996." Sales in jumped in Spain 163%; in Italy and Mexico, 37%; and in Canada, 12% (PORTLAND OREGONIAN, 9/19).