Nike has been known for its brand name which is valued to $19 billion in the global market. However these days even Nike is suffering with losses leading to drop in their share price up to 7%. North America is considered to be one of the most potential market which derives 45% of the total revenue of the company. Nike is skeptical about its overall growth in the next quarter and is expecting just to be in single digit.
Currently due to tough competition from its strong competitors like Adidas and Under Armour, Nike’s sales and revenues have dropped down in overall market. However the situation at the competitor’s end is similar to that of Nike. If we look at the other markets outside US, Nike still have lot of potential and is still growing. Statistics for other markets like Japan, China and Asia looks descent with increase in sales by 9%, 15% and 8% respectively.
Nike’s sales figures have been positive with their current profits till March since three months amounts to $950 million and there has been a growth of nearly 8%. Even though Nike might be struggling to achieve its targets in US, but their numbers outside US shows a positive sign of growth and development for them.
Nike has also been facing stiff competition from the online retailer like Amazon who are curbing the Nike’s store retailers business ultimately leading to losses. Departmental store giant JCPenney earlier announced a deal with Nike to allow them to run Nike Shops in their retailer outlets but are struggling at this moment.
With the existence of the online retail market available to the customer has hit all the retail store businesses ultimately hitting the profits of these big brands like Nike, Finish Line, and Dick’s. All the companies are worried about the fall in their profits due to the online retail market which provides more variety at less price. Not only the sports apparel industry but the huge giant retail and departmental stores that were established across the US like Kmart, Sears to name a few have suffered huge losses and had to shut down some of their stores in order to survive in the market.
Nike has been taking some strategic decisions to improve their sales figures by focusing their online presence for the customers and developing a new line of technology infused products like shoes that might lace themselves.