Titles published by Rocklands Communications:
Mar 2009 • Issue 25
Nike reorganises world marketsAs a reflection of the changes in the importance of world markets, Nike has announced plans to reorganise the company into six new regions – Emerging Markets (which will include Southern Africa), North America, Western Europe, Eastern/Central Europe, Greater China and Japan. This forms part of an ongoing global restructuring of the company announced earlier this year, which will result in fewer management layers and an increased focus on core category business areas.
The Emerging Markets will be headed by Jayme Martin, former Vice-President (VP) and GM of the Americas region. Martin was a VP of Footwear in EMEA, where he led an increase in Nike's footwear business and presence in the region, before becoming GM of the Americas region. He has more than a dozen years’ experience at Nike. The six new regions will replace the current four geographical regions – US, EMEA (Europe, Middle East, Europe and Africa) Asia/Pacific, and the Americas, each incorporating emerging markets. Although still performing better than most athletic brands, Nike’s 2008 performance had been hampered by their acquisition of Umbro in the latter half of last year, higher manufacturing costs and lower sales in Europe, which almost halved their 3rd Quarter profit. However, according to Sporting Goods Intelligence Europe, Nike’s managers say that the brand had raised its US market share by 2.4 points last year, to become more than three times bigger than the next brand in the US market. The Nike group’s pre-tax income for the US market increased by 2% to $357-m. But, they were forced to downgrade the assets of Umbro, resulting in a $241-m after-tax impairment charge (a new term for writing off payments for goodwill that turned out to be of little value) that reduced third quarter earning by about 49c/share. Without the Umbro costs, Nike’s earnings per share would have increased 7.6% to 99c/share. “While we continue to view Umbro as a vehicle for long-term growth within the Nike portfolio, we have concluded that the value of the company’s investment in Umbro has declined,” Nike president and CEO Mark Parker said in a statement. According to SportsOneSource Media’ SGB Update, Nike plans to stop manufacturing at three footwear factories in China and one in Vietnam over the next year, and will cancel shipments from several apparel contract plants. They will also close down their Niketown in Honolulu. The global restructuring could lose up to 1,400 jobs, around 4% of its global staff. About us | Contact us Sports Trader | Tackle Trader | Directory | Promotional publications Sports Trader is published bi-monthly by Rocklands Communications If you have comments or suggestions regarding this website please contact the webmaster |
