Blog: Leonie BarrieNike realigns global footprint

Leonie Barrie | 23 March 2009

Sporting goods giant Nike last week unveiled plans to reorganise its namesake brand into six regions with reduced management in a bid to make its operations more efficient and trim costs. The Beaverton, Oregon based firm hopes the changes will also give it an increased focus on core categories and take it closer to its consumers.

The moves are part of an ongoing restructuring of the business which could lead to the loss of up to 1,400 jobs – and come just two days after the company said higher costs, lower sales in Europe and weakness at its Umbro football brand almost halved third quarter profit to $243.8m. It also said future orders of Nike brand athletic footwear and apparel are 10% lower than last year.

Under the new proposal, the brand will target six new geographies: North America, Western Europe, Eastern/Central Europe, Greater China, Japan and Emerging Markets.

Changes are also underway at specialty clothing retailer The Gap Inc, which is reducing the size of its board from 13 to 10 members, and lowering directors' pay as part of an ongoing focus on cost-cutting. The San Francisco based company also disclosed that chairman and CEO Glenn Murphy has volunteered a 15% reduction in his annual salary.

As part of the company-wide measures, board members will see their annual cash retainer and stock compensation lowered by 15% in 2009, while merit-based salary increases are also being eliminated for most headquarters employees.

German fashion designer Jil Sander has been signed up by Japan's Fast Retailing to oversee men's and women's wear at its Uniqlo casual clothing chain. Sander will be involved in all aspects of the design and making of the Uniqlo line – and will also work on a special Uniqlo collection. The designer’s appointment will help broaden the brand's appeal as well as boosting the quality of its garments. 

There was also good news at UK department store chain Debenhams, which has vowed to create 1200 new jobs across the business by the end of 2010 after first-half profits rose. Although like-for-like sales for the period dropped 3.6%, results were helped by higher transaction values and better margins.

The prospects for the UK retail sector as a whole came under the microscope last week as top executives met in London to discuss how the sector is performing. Marks & Spencer, New Look, Debenhams, Sainsbury’s and Mothercare were among the firms who shared insights into how their businesses are navigating the downturn and how shoppers are behaving during the recession.



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