Nike’s Raw Material and Transportation Costs Have Been Raised
According to the report that Nike is going to increase its shoes and clothes price to five to ten percent. 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. Of course, this was not the first time for Nike to raise its product price.
About the cost pressure of the first-line sports brands,
it may be still ultimately passed to the terminal retail market. It was reported by the "Wall Street" that Nike will increase its shoes and clothes' price to five to ten percent. In the autumn of this year, Nike's most expensive sports shoes will be sold and it is going to be sold at 315 dollar, and it is also the time for this policy to accept inspection.Yesterday (August 21), it was told by an apparel industry analyst to the "Daily Economic News" that Nike's raw material and transportation cost will continuously increase in the recent two years. This action brings pressure to its profit growth. This time's objective of price growth maybe is to improve the margin of profit. Time is needed to be observed on whether this practice is going to raised a round of price tide.On the basis of the "Street Wall Journal", Mary Remuzzi who was the headquarter spokesman of Nike indicated that the rise of Nike in price was not blind. "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. Related people in charge, however, has not been contacted at the press time.This was not the first time we heard the news that Nike will raise its products' price. It has been indicated by MaryRemuzzi in last year's March that in 2012 spring, Nike is going to make an increase on its shoes and clothes products worldwide. 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. The reason was that because of the continuous increase on raw material and transportation costs, a lot of pressures have been brought to its profit growth."But I think there is a small gap between raw material costs and selling prices". The rising price reflected more on labor costs, marketing costs, research and development costs and other aspects. It was an obvious thing that in order to enhance the profit margin, it was Nike's duty to handle the higher cost pressure of Nike this year. When looked up Nike's earnings paper, reporters found that its fourth-quarter's net income was 549 million dollars, and compared to the same period of last year's 594 million dollars, if fell 7.6 percent. The company once indicated that the profit margin's decline mainly because of the profit margin. In addition, it took the related expenses of Nike brand into consideration. 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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