How Can Nike Survive This Problem?

According to the world clothing shoes and hats net, in 2017, Forbes

On the list of value, sporting goods giant Nike still ranks first in the value of 29 billion 600 million dollars, and the double eleven test smart stores have also handed out a good answer in China.

But there is no doubt about it.

A little annoying.

"Heaven" tax avoidance scandal

First of all, Nike was involved in the "Heaven document" scandal.

"Paradise documents" refers to the 13 million 400 thousand documents released by the International Union of investigative journalists (ICIJ), which revealed the tax avoidance of trillions of dollars assets including the queen of England.

Although these behaviors may not violate the law, Nike is also involved in public opinion as events continue to ferment.

The names of the two sports circles of F1 rider Hamilton and Nike are also exposed.

Under the pressure of morality and public opinion, Nike responded quickly.

"Nike companies comply with tax regulations and strictly ensure that their tax files are in line with Nike's business and investment."

Of course, in strict sense, tax avoidance is not illegal, but it actually affects many people's lives. Enterprises can gain higher profits by avoiding tax, which directly leads to the reduction of local government revenue, and local finance is closely related to the lives of people living here.

When income is getting more unbalanced and the situation is becoming more and more unstable, millions of people protest against apple and Nike and other "tax havens". They protest more about these companies claiming that "consumers are God", compiling gorgeous social responsibility reports, making money from users, but by hypocritical tax avoidance and hypocritical attitude of ordinary people.

From the perspective of Nike, although their responses have defined their responsibilities, they have also flaunted themselves.

But for consumers, this answer is not a heart to heart, nor can it be accepted by consumers.

According to the documents disclosed, Nike's tax avoidance measures saved him a lot of tax costs.

But from this year's situation, although the financial data of Nike looks very good, the problem it faces is bigger and bigger.

After all, in 2020, they set a target of $50 billion in Nike2015.

Judging from their revenue appreciation of US $30 billion 600 million in 2015, the goal of achieving 50 billion is to achieve an annual compound growth rate of about 10.3%, which is a rather difficult goal.

In addition to the financial problems, Nike has made many mistakes in the NBA stage, which is the most focused and the most valued Nike.

No "tear resistant" Jersey.

In 2015, Nike announced that they took the place of Adidas to win the official sponsorship of NBA from the start of the 2017-18 season, and it was reported that the amount reached 1 billion US dollars in 8 years.

After signing the contract successfully, Nike made a lot of layout.

Including the introduction of 4 different varieties of uniforms, LOGO will be displayed on the official version of the uniforms, made of brand-new plastic bottles made of Jersey, the main concept of environmental protection, and added the NikeConnect Technology launched by Nike.

In addition, Nike has signed a big contract with NBA superstars, and people have reason to believe that NBA has entered the age of unification that Nike is close to monopoly.

However, on the most basic "tear resistant" level of clothes, Nike has made a big basket, which makes users laugh, Adidas is "sitting at home and enjoying the sky".

At the end of the opening game of the Cavaliers facing the Celtics, Nike's most expensive basketball player Lebron James became the first player to experience the rip rip in the new season.

8 days later, Nike president and CEO Mark Parke said in an interview that the problem has been resolved.

But then it was the beginning of a series of nightmares.

Valiant striker Raymond Green and Bradley Bill led to the ripping of the shirt in the conflict. The 76 year old rookie of the two grade rookie Simmons was ripped off. The knight forward Kevin Le Fu also experienced the same situation, plus the Lakers' Taylor Ennis...

The five players' uniform had been damaged to varying degrees.

What is even more surprising is that the 5 players are also Nike's own players.

In the first season after becoming a NBA shirt sponsor, frequent rip tearing is an intolerable event, especially in the Nike sports giant.

In November 7th, Nike issued an official statement:

"We are very concerned about the situation in the competition and are working hard to find solutions, including the standardization of the modification process and the strengthening of the competition day.

Sewing strength.

The quality and performance of our products are very important. Now we are working with NBA to avoid such a situation in future matches. "

It is understood that this New Jersey is made of new technology, which is made of Alfa yarn (Alpha Yarns) and recycled polyester (each bottle has about 20 recycled plastic bottles), which is consistent with the sustainable development strategy of environmental protection.

In addition, Nike has made a more detailed adjustment to the design of the Jersey through studying the 3D body positioning of the players.

However, the repeatedly torn shirt has greatly weakened the new technology. People can not help but sweat for Nike.

Harden Currie's star is busy.

In addition, after Nike became the main sponsor of the NBA Jersey, it seems that it failed to make the player sponsored by the competitor become her own mobile billboard. The common events of "CBA" and so on appeared in NBA.

From pre season, harden and others to cut or cover the Logo, the stars of every brand are trying to reduce the exposure of Nike.

By the end of the new season, UA's star Stephen Cooley rolled up her stockings and blocked Nike's logo, while Adidas's star James harden was more direct and cut off the part of her stocking with Nike "check".

For Nike, the embarrassment of NBA is only one of the negative aspects in recent years.

In this year's 3. 15 evening, Nike was exposed to air cushion shoes without air cushion scandal, it is still fresh in memory.

In fact, sales of Nike began to decline last year.

In the 12 months ended May 31st, Nike Group sales grew 6% to 34 billion 400 million US dollars, net profit rose 13% to 4 billion 200 million US dollars, Nike brand sales increased 8% to 32 billion 200 million US dollars, gross profit margin further dropped 160 percentage points to 44.6%.

Obviously, the growth rate of Nike brand has lagged behind the growth rate of the group.

Performance decline can not be reversed as soon as possible, the product frequently appears quality problems, competitors strong sniper, but also deep in the tax avoidance scandal.

It can be said that the current Nike is facing the most difficult situation in recent years, and Nike, which is deeply trapped in the vortex, has come to a key time node.

Aggressive Adidas

At the same time, Nike's old rival adidas has recovered strongly and has been eating the Nike market.

In this case, in June 15th of this year, Nike CEO Mark Parke (Mark Parker) announced that in order to deal with the decline in sales, the company intends to pform its global business and carry out layoffs of about 2% people, or 1400, and simplify the regional structure from 6 to 4.

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In addition, Nike has launched the "Consumer Direct Offense" plan, hoping to focus on key market and digital sales, reduce product quantity and simplify product line.

These adjustments are beginning to emerge in this year's double eleven.

In November 8th, the US sports brand Nike and Tmall's new retail cooperation made strategic progress. The two intelligent stores jointly opened the first place to conduct the digital test of order and passenger flow.

At the same time, Nike's 50 direct store stores are also in line with the "double 11" integration of online and offline channels this year, realizing the simultaneous sale of multiple platforms.

Attaching importance to the Nike of the Chinese market, we begin to pay more attention to the strength of the channel.

In addition, Nike is also preparing to rely on yoga to increase women's sportswear and leisure wear. They will open the sports pants' monopoly area "pant studios" in its 5000 stores and launch the Yoga market.

According to Nike brand President Trevor Edwards, women's sportswear and sportswear business has grown faster than men's wear in Nike sports and casual wear with annual sales of $7 billion.

From the earnings report, the adjustment of Nike has shown its effectiveness.

In the first quarter of the past 2018 fiscal year (from June 1, 2017 to August 31st), Nike achieved a revenue of $9 billion 70 million, basically unchanged from the same period in the 2017 fiscal year, with a net profit of 950 million US dollars, down 24% from the same period last year.

Earnings per share were 57 cents, exceeding analysts' expectations of 48 cents.

Even beyond expectations, the market is not fully recognized.

Footwear News website article said that Nike's quarterly performance is better than expected, but its steady growth in international regional revenue has been offset by the decline in sales in North America. In fact, this is the first time that Nike has dropped in the US in the past three years. Overall, the sales growth of Nike in the current quarter has reached a new low of seven years.

In addition, at the end of October, Nike's rare official website in the United States launched a 48 hour 40 percent off promotional campaign for more than 200 items.

Double eleven, Nike also launched the activities of designated commodities as low as 50 percent off. According to incomplete statistics from ecosphere, there are 366 items in discount footwear.

However, in the eyes of experts, such a move has the meaning of cleaning up inventory.

Camilo Lyon, an analyst at Canaccord, said: "Nike has made more efforts in this quarter, and more sales of footwear platforms have slowed down.

Nike's slightly outdated innovation process has made little progress.

At the same time, GoldmanSachs downgraded Nike's stock from buying to neutral.

At the same time, Adidas's third quarter earnings report showed strong sales and earnings performance, the most notable of which is its expansion in China and North America.

Driven by fashion and direct selling, Adidas is coming back strong, threatening the dominance of Nike.

Don't forget, 2018 is the year of the world cup. In football, adidas has greater influence than Nike.

In November 10th, they just released the official use of the Russian World Cup. They also released 8 national team robes at the same time, preparing for a big victory in the world cup.

Adidas released the official use of the world cup and a series of robes.

Of course, as a whole, the leading edge of Nike is still obvious. Once their reform is effective, the Nike that is out of difficulty can continue to maintain its giant position in the world, and even further consolidate its leading edge.

But at the moment, the huge Nike Empire needs enough time to adjust what they want, and time is exactly what Nike is most lacking in.

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