NIKE MAPS GROWTH PLAN IN WOMEN’S ACTIVEWEAR
Byline: Phil Adamsak
PORTLAND, Ore. — Along with defending the company’s labor practices, Nike executives at the company’s annual meeting here Monday took time to spell out the growing importance of women’s activewear in its product lineup.
An estimated 1,800 turned out for the two-hour meeting at the Portland Convention Center.
Philip Knight, chairman and chief executive officer, and other executives outlined a product and merchandising expansion plan for women’s sport apparel, with a goal of further dominating the $17 billion activewear market.
Women’s apparel sales in the year ended May 31 increased by 125 percent compared to the year-earlier period, said Stephen Gomez, senior vice president of apparel.
In the U.S., the company aims to build its women’s business by offering more women’s apparel generally in its NikeTowns and in concept shops in sporting goods stores and specialty stores, Gomez said.
At NikeTown, sales of women’s apparel last year increased 20 percent, he said.
Major expansion strategies for Europe and Asia include increased retail presentations in women’s sports, especially golf, soccer, and basketball, Nike executives said.
Concept shops have already been successful in Britain and Japan, Gomez said.
While the executives gave no more specifics, Gomez said in an interview in April that women’s accounted for 20 percent of Nike’s apparel sales and the goal was to bring them to 40 percent by 2002. Nike’s total apparel sales in the U.S. and overseas in the latest fiscal year came to $2.52 billion.
Discussing the overall activewear market, Gomez cited Lady Foot Locker as the only retailer that is maximizing the women’s activewear business, but on the vendor side he had kudos for the marketing efforts of Polo Sport, Nautica and Tommy Hilfiger.
To further highlight the importance of women’s at Nike, the meeting featured appearances by WNBA players Sheryl Swoopes and Cynthia Cooper, as well as Val Ackerman, president of the WNBA. Nike has a marketing partnership with the WNBA, which completed its inaugural season earlier this month.
Ackerman called this year’s WNBA season a real watershed — the biggest sports story of the year.
Nike officers went to pains to identify growth strategies, after the first-quarter report last week showed a slowing in the basic domestic sales of athletic footwear. Knight said the sluggishness would probably hold year-to-year revenue growth below the company’s 15 percent target.
However, Knight and president Thomas E. Clarke promised that growth in apparel won’t be at the expense of footwear — a common concern among analysts.
Knight said the firm’s new Jordan brand, an apparel and footwear line launched by Michael Jordan and Nike, will be a major expansion factor. As reported, the brand plans to move into women’s in the next two years.
As for the company’s labor practices, Knight said, “We want to be good citizens.” He pointed to his membership on President Clinton’s coalition on fair labor practices, which aims to police alleged overseas sweatshops.
Early this year, Knight commissioned former UN Ambassador Andrew Young to survey factories in Indonesia and Korea and report on application there of the Nike Code of Conduct, a five-point policy that has been printed in miniature and distributed to workers in a number of languages.
The company received a positive report from Young on his tour, although some labor and activist groups treated the report skeptically.
Knight, in turn, termed a recent report critical of conditions in Chinese factories as a publicity stunt.
Through its contractors in Southeast Asia, Nike, which does not manufacture its own products, employs about 500,000 people, Knight told shareholders. That’s the equivalent of a typical American city, Knight said, and it’s only natural that some bad incidents might occur. But he’s trying hard to catch them, he added.