SBD/19/Finance

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  • ADIDAS WHITTLES AWAY AT U.S. MARKETS; EYES WALL STREET

              adidas and company Chair Robert Louis-Dreyfus are
         profiled by John Tagliabue in the business section of the
         N.Y. TIMES, under the piece on Nike's decreasing third
         quarter earnings.  Tagliabue writes that Louis-Dreyfus "has
         turned things around" at adidas, pouring "large sums into
         creating a cooler image for Adidas with young people tired
         of Nike's in-your-face style."  Louis-Dreyfus: "We're going
         in the right direction."  But Nike GM Central Europe Stefano
         Caroti said that adidas "is building its recent success by
         using Nike's winning formulas."  Caroti: "They're copying
         us, from our ads to our products.  You put a swoosh at the
         end of their commercials, they're ours."  Louis-Dreyfus said
         adidas "is less centralized than Nike," and "less dependent
         on American superstars."  Louis-Dreyfus, on Nike's Phil
         Knight: "He's the Disney of sports, into the marketing of
         sports at the entertainment end.  We try to be more
         cosmopolitan" (John Tagliabue, N.Y. TIMES, 3/19).
              WHAT'S AHEAD: While adidas has "gained ground in more
         popular sports" in the U.S. by signing "big-name athletes,"
         Louis-Dreyfus said his "top priority" is to "accelerate
         growth in the [U.S.] by continuing to whittle away at the
         market shares of Reebok and Fila."  adidas also plans an IPO
         on Wall Street "as early as next year" (N.Y. TIMES, 3/19).
    
    

    Print | Tags: Fila USA, Finance, Nike, Reebok, Walt Disney, Washington Nationals
  • FANSONLY NETWORK FINDS IT HAS FINANCIAL FANS, TOO

              University Netcasting said that it has closed a new
         round of private funding in excess of $5M, led by Brentwood
         Venture Capital and supported by its investor syndicate:
         Baccharis Capital, iXL Inc. and Lawrence & Co.  The funding
         will finance the continued growth and development of the
         FANSonly Network.  As part of the deal, Brentwood General
         Partner G. Bradford Jones has joined the Board of Directors
         at University Netcasting (University Netcasting).
    
    

    Print | Tags: Finance
  • NIKE'S THIRD QUARTER EARNINGS DOWN 70%; MORE CUTS EXPECTED

              Nike yesterday reported revenues and earnings for the
         company's third quarter ended February 28, 1998.  Third
         quarter net income totaled $73.1M or $0.25 per share
         compared to $237.1M, or $0.80 per share from the same period
         one year earlier.  Third quarter revenues were $2.22B, down
         8% from $2.42B last year.  Nike also reported that its
         fourth quarter '98 earnings will be reduced by an estimated
         restructuring charge of between $125-$175M.  Included in the
         charge will be costs associated with the anticipated
         reduction in the company's global workforce of approximately
         1,600 positions, or 7% of the workforce.  Nike reported that
         U.S. footwear revenues declined 18% to $800.4M, compared to
         $980.4M last year.   Nike Chair Phil Knight: "The actions we
         announce ... as difficult as they are to undertake as they
         impact our human assets -- will result in a leaner and more
         competitive Nike as we move into fiscal 1999."  Nike said
         that measures taken, combined with efforts to maintain an
         efficient cost structure in the U.S. and Asia Pacific, are
         expected to result in projected reduced spending in excess
         of $100M in '99.  Gross margins for this year, however, will
         be negatively impacted by approximately $100M (Nike).
              HOW IT'S PLAYING: CNBC's Felicia Taylor called the
         earnings report "right on line with street estimates," with
         earnings down nearly 70%.  Nike stock gained 1 3/4 per share
         on Wednesday, closing at 44 1/8 ("The Edge," CNBC, 3/18). 
         In N.Y., David Bank reports that Nike attributed the U.S.
         "shortfalls to an intense price war, as sneaker makers tried
         to move inventory off the shelves."  Nike said sales also
         fell in Asia, with the "biggest trouble spot" being South
         Korea where sales fell 52% (WALL STREET JOURNAL, 3/19). In
         the lead story of the N.Y. TIMES' "business section," Sharon
         King writes under the sub-head, "In Footwear Wars, Nike
         Lags, Adidas and Other Surge."  King: "While outside factors
         conspired against Nike, management made its own missteps: a
         surge in inventory, an increase in prices, a lackluster ad
         campaign, a failure to hit upon a new big idea."  King adds
         that recently, Nike "seems to have become too big, too
         comfortable and too establishment for the young, energetic
         consumer" (N.Y. TIMES, 3/19).  The AP's William McCall said
         that Nike "has become viewed by many shoe-buying teens as a
         synonym for corporate America, and their views are beginning
         to show up on the bottom line" (AP/Mult., 3/19).
              
    

    Print | Tags: Finance, Nike, Washington Nationals
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