BEAVERTON, Oregon: Nike Inc. managers have said they will add 100 new stores worldwide over the next three years as part of a plan for the world’s largest athletic shoe and clothing manufacturer to reach $23 billion (Rs1,01,200 crore) in sales by 2011.
Nike chief executive Mark Parker said the strategy was to boost the market for both the company and its retail partners with a more personalized approach to individual customers.
The company will work to improve its geographic marketing across the world, but especially in the high-growth areas of Russia, India and China, with China predicted to become the No.2 market for Nike products over the next few years. “In China, 50 million kids are starting to play basketball,” Nike brand president Charlie Denson said. “They haven’t bought their first Nikes yet, but they will.”
The global retail push is much needed, according to Sara Hasan, an analyst with McAdams Wright Ragen in Seattle. “Nike doesn’t really have a choice.”
Parker told an annual meeting of Nike analysts and major institutional investors that the strategy was part of a new emphasis on defining consumer needs by dividing the brand into six broad categories: soccer, basketball, running, men’s training, women’s fitness, and sports culture. The company had earlier divided the brand into three components: footwear, apparel and equipment.
“We’re fundamentally changing the way we organize the company,” Parker said, emphasizing that this is a growth strategy and no cutbacks are planned.
Nike, which had sales of $15 billion (Rs66,000 crore) in 2006, hopes to tap into more of the individual needs of its customers through its stores, retailers and the Internet. “Consumers have never held as much power as they do today,” Parker said.
In addition to athletic shoes and clothing designed for competition, Nike hopes to expand its “sports culture” segment for its products as fashion and every day use—such as different basketball shoes for the court and for the street.