Mark Parker is thinking even bigger at Nike Inc.
The president and chief executive officer of the activewear giant rolled out an ambitious plan to boost revenues to $50 billion by the end of 2020, up from a $30.6 billion top line last year.
“Today, we’re showing how Nike is built for growth — now and for years to come,” said Parker, who was laying out his plan for analysts at a meeting today. “We lead because we serve the athlete and consumer completely — through breakthrough product and personal experiences, all around the world. As we look toward 2020, we are accelerating the pace of innovation across every area of our business to deliver the very best to athletes everywhere — when and where they want it.”
Nike plans to better use its digital activities to speed up development across the company, from design and product creation to manufacturing.
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At its meeting on Wednesday Nike essentially pulled together the company’s world domination plans in a daylong presentation. A key thread from the speakers was the targeted concentration on the women’s business. The women’s business was described as creating a “massive growth opportunity for the company.”
President Trevor Edwards reviewed the focus the company has placed on the women’s business, which at $5.7 billion is already the largest sports brand for women. The goal is to grow that business to $11 billion by 2020. Edwards discussed the Nike concept store for women that opened in three cities and characterized it as personal shopping meets personal training. Edwards called it, “A full and powerful retail experience.”
Jeanne Jackson, president of product and manufacturing introduced new tights for men and women that targets the leg muscles that tire quickly. She zeroed in on women’s sports bras and noted that Nike has used its flyknit technology in the bra — making it lightweight and using the lockdown philosophy. Jayme Martin, vice president and general manager of global operations pointed to the stores for women as well and described them as providing bra fitting guides and gait analysis. Martin said that Nike has the largest training community of women covering 146 countries and 18 languages. “The women’s business is on fire,” he said.
Martin went on to say that the women’s tights with prints and patterns had led the product to triple in business over the past couple of years. He highlighted the Nike Sky Hi Dunk, which is a sneaker with heels for women and said it became a $100 million franchise. It was so popular that Nike now has 6 versions, each a $100 million franchise.
Beyond the targeted women’s business, Nike also discussed its partnership with Dreamworks and Nova to build a 3-D design system that will transform shoe design. It will be able to create a digital print application in 3 seconds. Jeanne Jackson said, “Dreamworks designs for the animated body in motion, while Nike designs for the human body.”
Nike also believes that the more control it has over its product on the selling floor, the better the sales will be. Jackson talked about the Stratford Westfield mall and said that it had 14 points of Nike distribution in the mall and that they do $27 million across all those points in the locations each year. However, she said that duplication in product and editing by buyers sometimes resulted in uninspiring presentations. She said if Nike could control those retail experiences, sales could increase there by $5 million.
Jackson told investors that its highly successful Flyknit sneaker will be up to 28 models this fall and in four years Nike has built the franchise with the goal of doing $1 billion in 2016. Jackson also reminded the audience that the Flyknit sneaker was originally introduced at the past Olympics and teased that another big product will be launched at the Rio games.
While other companies talk in millions, Nike talks in billions. Its e-commerce business is planned to grow from $1 billion to $7 billion by 2017. Its Air Jordan franchise is planned to be a $4.5 billion business by fiscal year 2020. Overall, Nike is targeting $50 billion in revenue by the end of 2020.