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 (accelerating direct-to-consumer)” and stated in the statement that this move will result in a net reduction in jobs, but did not explicitly reduce the number of employees.
Nike said that the layoff expenses incurred due to the implementation of the Consumer Direct Acceleration plan are expected to reach 200 million to 250 million US dollars. between (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 focus resources on investment. on a rapidly growing business.
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 and reduce their 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 thoughtful and robust layoff practices and express our gratitude to employees who have been laid off. Empathy and respect, consistent with company values, legal obligations, a competitive market and employees’ personal circumstances”.
NIKE also said in another statement: “We will build a leaner company, quickly transform and adapt Future market. The company is transferring resources internally, hoping to invest funds in high-potential areas.”
On the supply chain of Taiwanese factories For Baocheng, the legal person believes that Nike accounts for about 30% of the shoemaking business revenue. The shoemaking business is expected to continue to adjust. It is expected that finished shoe shipments will decline by 20 to 30% in the second quarter and will continue to adjust to 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.
As for Baihe, the legal person believes that Nike accounts for about 20% of revenue. It is estimated that traditional business operations in the second quarter Revenue is expected to decline by 20 to 30%. After adding in the contribution from real estate, revenue will decline slightly in the second quarter.
Nike relies on China
to launch “digital” self-rescue
The biggest blow to Nike caused by the epidemic is the surge in inventory.
As of May 31, Nike’s inventory reached 7.37 billion US dollars, a year-on-year increase of 31%, an increase of more than 1% over the same period last year. 1.7 billion US dollars – compared with the growth rate of no more than 10% in previous years, Nike’s 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 have suspended operations due to the epidemic, causing Nike to go online. Quarterly revenue was US$6.313 billion, a year-on-year decrease of 38% and a quarter-to-quarter decrease of 37.5%. From a regional perspective, all regions experienced a decline of nearly 40%. Among them, the best performance in China was only a 3% decrease.
Nike stated that in the past few years, Nike has begun to transform its long-term distribution and wholesale model by investing in new models. Provide consumers with a better shopping experience. “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 the shoes are sold, the relationship with the consumer ends, and the user’s thinking is that the user purchases Before and after, during use, experience, the core is whether all digital strategies can be actively and effectively deployed based on this thinking.” Zhang Qing said.
A report from Oliver Wyman showed that before the epidemic, offline stores of shoes and clothing were already facing pressure. , many clothing brands have begun to slow down their offline expansion or even close stores, and some leading brands have begun to upgrade their offline experience. </p
