Nike announced that the layoff expenses incurred due to the implementation of the Consumer Direct Acceleration plan are expected to reach between US$200 million and US$250 million (approximately RMB 1.7 billion).
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Recently, Nike announced an e-commerce plan called “Consumer Direct Acceleration” , and said in a statement that the move would result in a net loss of jobs, but did not specify the number of employees to be laid off.
Nike stated that the layoff expenses incurred due to the implementation of the Consumer Direct Acceleration plan are expected to reach between US$200 million and US$250 million (approximately RMB 1.7 billion).
A spokesperson for the brand stated that the purpose of the second round of layoffs is not to save costs, but to Resources are focused on investing in rapidly growing businesses.
According to Nike’s annual report, the current number of employees worldwide is approximately 76,700.
The COVID-19 epidemic has severely damaged the global economy and led to dismal performance in the retail industry. Many physical stores have been forced to “close their doors to reduce burdens,” and the Nike brand is no exception. According to the latest financial report released by Nike, affected by the epidemic, revenue fell by 38% in the last quarter, but the performance of the e-commerce department increased significantly by 75%, accounting for 30% of the overall revenue.
Nike announced that it will lay off employees in two batches!
Nike announced that it will lay off employees in two batches, in July and autumn.
According to the U.S. Securities and Exchange Commission (SEC) filings, Nike has 76,700 employees, but it is unclear how many people will be affected.
Nike said: “We are committed to using thoughtful and robust layoff practices that are consistent with our company values, legal obligations, highly competitive markets, and individual employees while showing compassion and respect for those who have been laid off. The situation is consistent.”
NIKE also said in another statement: “We will build a more lean company, quickly transform and adapt to future markets. The company is transferring resources internally, hoping to invest funds in high-potential areas.”
As for Baocheng in the supply chain of Taiwanese factories, the legal person believes that Nike accounts for about 30% of the revenue of the shoemaking business. The shoemaking business is expected to continue to adjust, and the shipment of finished shoes is expected to decline in the second quarter. 20-30%, and will continue to adjust into the third quarter. The recession is expected to narrow in the fourth quarter.
The legal person conservatively estimates that Baocheng shoemaking shipments in 2020 will decline by 17.34% compared with 2019.
For Baihe, the legal person believes that Nike accounts for about 20% of revenue. It is estimated that the traditional business revenue in the second quarter will decline by about 20 to 30%. After adding the contribution of real estate, the second quarter revenue will be will decline slightly.
Nike relies on China
Carry out “digital” self-rescue
The biggest blow to Nike caused by the epidemic It’s a surge in inventory.
As of May 31, Nike’s inventory reached 7.37 billion U.S. dollars, a year-on-year increase of 31%, and an increase of more than 1.7 billion U.S. dollars over the same period last year. Compared with the growth rate of no more than 10% in previous years, Nike’s The inventory pressure this year can be imagined. Nike’s most impressive revenue performance comes from online sales, with revenue growing by 75%.
Nike’s self-operated stores in North America, Europe, Africa, the Middle East, Asia-Pacific and Latin America were suspended due to the epidemic, resulting in Nike’s last quarter revenue of US$6.313 billion, a year-on-year decrease of 38% and a quarter-to-quarter decrease of 37.5%. Judging from the above, all regions have declined by nearly 40%. Among them, China has the best performance, with a decline of only 3%.
Nike stated that in the past few years, Nike has begun to transform its long-term distribution and wholesale model and provide consumers with a better shopping experience by investing in new models. “It is expected that 50% of Nike’s business will be digital. With the help of connected data, inventory and members, we can quickly provide Nike’s best products and services. Realign the business and put members at the center of everything. Expand investment in small, digitally driven stores , such as Nike Live.” “When shoes are sold, the relationship with consumers ends, and user thinking is before and after the user purchases, during use, and experience. Whether all digital strategies can be actively and effectively deployed based on this thinking is the core .” Zhang Qing said.
A report from Oliver Wyman shows that before the epidemic, offline stores of shoes and clothing were already facing pressure. Many clothing brands began to slow down their offline expansion or even close stores. Some leading brands have begun to upgrade their offline stores. Next experience. </p
