Nike joins the fleet of retailers slowly reopening stores.
On Thursday, the Beaverton, Ore.-based activewear retailer said store openings have begun in more than 15 countries. By region that’s about 40 percent of Nike-owned stores in Europe, the Middle East and Africa, 15 percent in the Asia Pacific and 5 percent in North America. Many have reduced operating hours. Nike Inc.’s wholesale partners in those countries have also begun to reopen stores.
“We are operating in a dynamic environment which will continue to evolve,” a company statement read. “We remain focused on prioritizing the health of our teammates and consumers and continue to follow the advice and direction of local health authorities and governments.”
The company’s reopening formula looks much like its peers: face masks in stores, deep cleaning and limits on the number of people in each location at once.
Nike, like many retailers, was forced to close stores in North America, Western Europe, Australia and New Zealand in mid-March to prevent the spread of the coronavirus. At the time, Nike said stores would remain closed until at least March 27.
Nike also closed the majority of its stores in Asia earlier this year as a result of the virus. As of Thursday, the company said 100 percent of Nike-owned stores and more than 95 percent of partner stores in Greater China and South Korea have reopened.
Some of those locations are operating with reduced hours. But the company said “retail traffic trends are progressing and while physical store traffic remains below prior-year levels, this is largely offset by higher conversion rates and continued strong digital demand.”
“We are encouraged by the recovery we are seeing in Greater China and South Korea as we continue to deepen our connection to consumers,” John Donahoe, president and chief executive officer of Nike Inc., said in a statement. “Even more so, consumers around the world are recognizing the need for an active and healthy lifestyle and sport is now more meaningful than ever. With our strong digital foundation, brand momentum and financial position, we believe this will be a catalyzing moment that strengthens Nike’s long-term future.”
During the March 24 conference call, Donahoe told analysts that engagement with Nike trainer apps in China grew 80 percent last quarter, the quarter ending Feb. 29. He added that the increased engagement translated to a digital growth of more than 30 percent in the region.
On Thursday, Nike added that the company’s digital capabilities “are serving us well. We are seeing accelerated new member acquisition and strong digital demand across the global marketplace, with increased traffic and engagement on our mobile commerce and activity apps.”
Even so, Nike is expecting to feel the effects of the store closures in the current quarter.
“In light of store closures, product shipments to wholesale customers have slowed, resulting in significantly lower wholesale revenue and higher inventory,” according to the company’s statement. “We continue to expect this to have a material impact on our Nike Direct and wholesale operations in North America, EMEA and [Asian Pacific Region] in the fourth quarter.”
In addition, a number of canceled sporting events this year will likely cut into revenues even further.
Nike’s stock, which closed up 0.62 percent to $86.55 a share, is up 2.7 percent year-over-year.