![]() ![]() Nike's future stores will be smaller, and hyperlocal Nike's new stores interact with the company's apps, including the ability to scan codes and immediately purchase outfits online. "Fundamentally the Consumer Direct Acceleration strategy is changing our financial and operating model resulting in healthy profitable growth for Nike," he said. Nike shares are down nearly 41% this year, while the S&P 500 is down 23%.Īt the company's annual shareholder meeting 2 ½ weeks ago, CFO Matt Friend noted Nike's gross margin - a metric closely watched by Wall Street - expanded 2.6 percentage points to 46%, in the past two years. In a recent note, Yih also said Nike is opening itself up to demand volatility by emphasizing DTC over the recurring revenue wholesale partnerships bring in. The Barclays analyst Adrienne Yih downgraded the company's shares this week, partially out of concern about excess inventory. Wall Street also has its doubts about Nike's direction. Some analysts, including Siegel, are wary of the perceived benefits of direct-to-consumer sales. The plan isn't without challenges and critics, including boutique retailers that have lost Nike accounts and Nike technology workers who complain about a loss of talent amid restructuring. "If the whole reason to pivot is to elevate the brand and pricing power, stores need to be full-price and brand-elevating."Īs part of its direct-to-consumer strategy, Nike is overhauling its digital infrastructure and making it easier to search its inventory on its apps and websites. "It's important to remember that stores are a part of direct sales," Siegel said. Though the mix of the new stores (full-price and discount stores) is unclear, Simeon Siegel, a senior analyst at BMO Capital Markets, previously told Insider it benefited Nike to open more full-price stores given it's working to establish the company as a premium brand. Even much smaller competitors, such as Allbirds, operate nearly as many full-price stores, roughly 35, as Nike does. Vans, which is owned by VF Corp., has more than 700 stores, according to VF's most recent annual report. Nike's store footprint is smaller than that of its peers. The other 87 Nike stores were for its Converse brand. At the time of the filing, the company had 209 clearance stores and 48 full-price stores. Nike had 344 US stores on May 31, according to its most recent annual report.īut its footprint is heavily tilted toward clearance, or "factory" stores. The company is set to report quarterly earnings on Thursday. ![]() Nike didn't respond to an email seeking comment for this story. He previously worked as a vice president in charge of store development for Sephora. In August, the company hired Jeff Gaul as vice president of global store development, according to his LinkedIn profile. Nike is looking for a North America real-estate finance manager, which the listing says is part of the company's "multi-year strategy of growth in the North America Marketplace." Other recent job openings include a real-estate business-development specialist and a real-estate marketplace-development specialist. Nike is also hiring for corporate real estate and in-store jobs. Social-media posts by Nike employees indicate stores are opening in Washington, DC the North Bronx in New York City and outside Salt Lake City. "They will be small footprint, digitally enabled mono-brand stores."įast-forward to 2022, and Nike's store strategy is finally coming into view, with new stores in the works in Louisville, Kentucky Lexington, Kentucky Liverpool, England Harlem in New York City Fresno, California and Silver Spring, Maryland according to news reports. "We'll be opening somewhere between 150 and 200 new stores," Donahoe said in June 2020. Nike CEO John Donahoe announced the store plan in 2020 during a quarterly earnings call.Īnalysts largely missed the announcement, which took place on the same day Nike reported a $790 million quarterly loss and quarterly revenue $1 billion below Wall Street expectations. The stores, which focus on digital technology - such as self-checkout through the Nike app and in-store pickup for online orders - will play a critical role in Nike's work to get products to customers faster, including shipping from stores. The strategy includes opening as many as 200 new stores in the US and Europe. Nike is accelerating its brick-and-mortar strategy as part of its evolving direct-to-consumer push, dubbed Consumer Direct Acceleration. ![]() The new stores are part of Nike's shift to more direct, digital sales.The stores are popping up all over the US and significantly increase Nike's store footprint.Nike is pushing forward on a plan to open as many as 200 stores within a two-year timespan.Account icon An icon in the shape of a person's head and shoulders. ![]()
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