June 15, Nike announced that it will cut about 2% of the global manpower, and cut its brand 1/4 shoes, the purpose is to transfer to the electricity business channel. It is estimated that the layoffs will involve more than 1,400 employees. Affected by the news, Nike closed down 3.22 percent the day, at $ 52.9. Then the next day, has been optimistic about the performance of Wall Street, the famous investment bank JP Morgan JP Morgan published research report, lowered the evaluation of Nike’s stock price, the day the stock fell again 3.3%, the closing price of 51.19 US dollars offer. According to the plan called “Consumer Direct Offense”, Nike plans to reduce its business unit from six to North America,air max 90 black volt, Europe, the Middle East and Africa, Greater China, Asia Pacific and Latin America four business units. In addition, Nike plans to focus its business on 12 major cities in 10 countries, and by 2020, the performance of these regions is expected to contribute 80% of the company’s growth.
Nike also announced the addition of “consumer direct response” sector. The main task of the department is to promote Nike brand in the network media, and more direct dialogue with customers, access to more timely and rapid market feedback. Nike cut off 25% of the models, will increase the proportion of online sales, reduce the physical store traffic, and in the future design of new models will be more directly absorb the views of consumers.
Footwear experts Wang Yong said: “The stock price decline and performance slowdown for the staff and structural reorganization have a certain impact, may be a fuse, but this may be a long time planning for Nike.” According to him from the Nike supplier Understand the situation, the media began to report their automatic assembly line equipment to strengthen the use of 3D print to create personalized custom sports shoes, etc., these actions have been carried out, similar to the layoffs of the major decisions are not made in a short time.
However, an unquestionable fact is that the Greater China region is facing an embarrassing situation of slowing growth. Despite the overall revenue growth, but in the Chinese market, the second quarter of fiscal year 2017 Nike revenue growth rate (according to the fixed exchange rate) is only 15%. In fact, Nike’s revenue growth in China has been slowing down for six consecutive quarters, the first two quarters of revenue growth rates were 21% and 17%. In the four quarters of fiscal year 2016, Nike’s revenue growth in Greater China was 30%, 28%, 27% and 23% respectively.