There Are Pressures in Nike’s Cost and Inventory
It was reported that Nike will raise its price to five percent to ten percent on its shoes and clothes. This change mainly because the continuous rising of raw materials and transportation. Nike is facing with the pressure of the cost and the inventory, so it increased its price. Absolutely, and Nike has increased its price for more than one time.
With regard to the first-line brands of sports,
it is likely to be transferred to the terminal retail market as well. It was reported by the "Wall Street" that Nike will increase its shoes and clothes' price to five to ten percent. This policy is going to be inspected by Nike in this year's autumn when it is going to launch its most expensive sports shoes (it is estimated to be sold at the price of 315 dollar) .An apparel industry analyst reported to the "Daily Economic News" on Yesterday (August 21) that in recent two years, there is an increasingly increase on the raw material and transportation of Nike. This action brings pressure to its profit growth. This time's objective of price growth maybe is to improve the margin of profit. Whether this practice will set off a wave of the price increase, it remains to be seen.According to the "Street Wall Journal", Nike's headquarter spokesman Mary Remuzzi said that Nike did not increase its price blindly. "We are always looking for ways to take advantage of new innovations and product performance to achieve the improvement of the product line". "Daily Economic News" reporters have called Nike in China's related PR department. But at the end of the time to distribute the news dispatch, they did not contact the relevant person in charge.It was not the first time for us to hear the news that there will be increase on the price of Nike's products. In March last year, MaryRemuzzi had said that in the spring of 2012, Nike will raise the price on a global scale aimed at its shoes and clothes products. In order to reply the oil, cotton and transportation's increasing price, this action has been made. Reporters have learnt from the apparel industry analyst above that actually in recent two years, the profit margin of Nike has continuously declined for a few quarters compared to other years. There was an unceasing increase on costs of raw material and transportation, its profit growth has experienced lots of pressures."But I think there is a small gap between raw material costs and selling prices". On some aspects, such as labor costs, marketing costs and research and development costs have more reflected the growth on costs. This time, obviously, Nike's price increase was to be in response to deal with the higher cost pressure and then to improve the profitability. It was found by reporters when they referred to the earnings paper of Nike that its net profit was 549 million dollars in the fourth quarter, and it fell 7.6 percent when we made a comparison with last year's same period that was 594 million dollars. It was once said by the company that the decline of earnings was primarily due to the decline of the profit margin. What's more; Nike brand's relevant expenses have been added as well. In this way, a wide range of revenue growth has been covered. Normal 0 7.8 Å 0 2 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:nh<; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-fareast-font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;}
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