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    Cost Pressures Forced Nike To Raise The Price Of New Sports Shoes At 2003 Yuan.

    2012/8/24 9:18:00 11

    Cost PressuresPrice IncreasesNike

    Affected by excessive inventory, the mainland

    Sports goods

    When brands are cleaning up their inventory by discount, Nike is unable to bear the pressure of cost increase. It plans to increase the price of some shoes and clothing by 5%~10%. Even a new sneaker will be sold at a price of about 2003 yuan, making consumers call "too expensive".


    Sports brand high inventory, increased cost pressures, finally let the first tier brands can not withstand.

    Media reports said Nike will increase its shoes and clothing prices by 5%~10%.

    It is reported that this autumn, Nike will launch the most expensive sports shoes tenth generation LeBron basketball shoes so far, which is expected to sell for $315 (about 2003 yuan), while the retail price of its ninth generation shoes will be about $250 (about 1590 yuan).


    Nike's gross profit margin continued to fall for 6 quarters.


    However, Nike is probably the only one who dares to declare its price rise.

    Affected by high inventory, mainland sporting goods brands have been discounting inventory by discount.

    Reporters visited in some business circles found that Lining, Anta, XTEP and other sporting goods discount basically more than 50 percent off, while Nike and Adidas only part of the seasonal goods only 20 percent off, or two new products 20 percent off.

    The relevant person in charge of Guangzhou friendship store told reporters that at present, no notice of Nike's price increase was received.


    An industry analyst said that with the rising cost of raw materials and pportation in the past two years, Nike has put pressure on its profit growth.

    The latest report shows that Nike's gross profit margin fell to 42.8% from 44.3% in May 31st, which has been declining for the sixth consecutive quarter.

    Sales in the Greater China market, the second largest market in Nike, also fell in the same quarter. Sales of products including footwear, clothing and accessories accounted for $667 million, down 3.89% from the third quarter.


    Morgan Stanley's research report shows that in the fourth quarter of 2012, Nike's global orders growth slowed from 18% to 12%, especially in China, where orders grew sharply from 20% to 2%.

    But as a direct competitor of Nike, Adidas's second quarter results in 2012 were very gratifying.

    Adidas's public figures show Adidas's sales in Greater China are 732 million euros, up 19% over the same period last year.

    Adidas forecast annual net profit growth from the previous 12%~17% to 15%~17%.


    Consumers: 2000 yuan is too expensive for sneakers.


    although

    Nike

    Spokesman Mary Remuzzi emphasized to the media that Nike is not blindly raising prices; "we are always trying to make use of new innovations and product performance to achieve product upgrading."

    However, the price rises and consumers will not buy it at the end.

    Mr. Cheng, thirty, is a professional sports editor, but when he heard a pair of basketball shoes priced at 2000 yuan, he still called "too expensive".

    "The general introductory version of the basketball shoes price is about 700~800 yuan, I learned that the star level version of basketball shoes at the most expensive price is about 1700~1800 yuan."


    Industry:


    The market has not improved recently.


    This year's slowdown in the retail market has affected the speed of inventory elimination in the sporting goods industry.

    PEAK, Anta and Anta declined 43.3%, 23% and 17% respectively in the first half of this year, and XTEP only slightly increased by 0.3%.

    Reporters from its semi annual report found that they expect sports goods industry may be frustrated this year, the fastest in the second half of the year will be a turning point.


    Not only the profits are confined, but also the enterprises are offering more concessions to distribution channels.

    XTEP recently announced in the HKEx that the group takes into account the fierce competition environment and needs a more flexible and attractive pricing strategy to adjust the wholesale discounts offered to distributors from 60% of the proposed retail price in 2012 to 62%.

    Xu Zhihua, chief executive of PEAK, said that the market has not improved in the near future, but is optimistic about the long-term development of the industry. This is due to the fact that urbanization in the rural areas of China and the changes in the lifestyle of the Chinese people have led to no change in the basic factors of more people's participation in sports activities.

    Most sporting goods brands actively clean up too much inventory and expect the industry as a whole.

    Stock

    The adjustment will take some time to complete.


     

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