Nike Inc. is the latest retailer to roll out its own version of a restructuring.
The athleticwear giant launched what it’s calling a “Consumer Direct Offense” that includes a microfocus on scaled production and quick delivery in a handful of major cities and a rejiggering of its global presence, which will result in a 2 percent reduction of its workforce.
Based on Nike’s most recent statistics, the reduction will affect roughly 1,400 workers.
“Today we serve our athletes in a changing world: one that’s faster and more personal,” Nike president Trevor Edwards said of the changes. “This new structure aligns all of our teams toward our ultimate goal — to deliver innovation, at speed, through more direct connections.”
Nike said the focus of its new consumer-centric plans are 12 “key” cities: New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan.
The company admitted that these cities and their respective countries are expected to account for more than 80 percent of Nike’s growth through 2020.
With the Consumer Direct Offense, Nike will be using insights from consumer habits and demands in these cities to localize product and influence product and designs going forward in real-time.
The company will also be paying much attention to the retail marketplace in these cities and to what shoppers are gravitating toward and using internal methods to keep product as relevant to the local consumer base as possible, while getting it to stores quickly.
Chairman, president and chief executive officer Mark Parker said, “The future of sport will be decided by the company that obsesses the needs of the evolving consumer. Through the Consumer Direct Offense, we’re getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever.”
Nike said it’s “on a path to cut production creation cycle times in half” through its “Express Lane” initiative, which creates, updates and fulfills products in response to consumer demand. The program is currently operating in North America and Western Europe and is set to be activated this summer in China, Shanghai, Seoul and Tokyo.
The Consumer Direct Offense also includes the creation of a new Nike Direct Organization, which will work to integrate Nike’s website, its direct-to-consumer retail and digital products, as well as some strategic wholesale partners.
Heidi O’Neill will serve as president of Nike direct and Adam Sussman will be chief digital officer.
Nike is also moving to a “simplified geography structure” now comprised of only four regions: North America; Europe, Middle East and Africa; Greater China, and Asia-Pacific and Latin America. The change will see financial reports based on these regions beginning in the company’s 2018 fiscal year.
Each of Nike’s new geographies also has its own executive leader. Tom Peddie will head up North America, Bert Hoyt will lead EMEA, Angela Dong will lead Greater China and Ann Herbert will lead APLA.
Hoyt was previously vice president and general manager of Western Europe and Herbert had the same title for Nike’s Emerging Markets segment, while Peddie and Dong have been in their respective roles since 2016 and 2015, respectively.
All will report to Elliott Hill, Nike’s president of geographies and integrated marketplace.
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