Blog: Leonie BarrieSports appetite continues to grow

Leonie Barrie | 4 July 2011

US sporting goods giant Nike has ended a stellar week in which it claimed "the global appetite for sports has never been stronger." The company not only beat analyst expectations with double-digit rises in fourth quarter profit and sales, fuelled by growth in North America and China - but also raised its long-term revenue outlook too.

"We delivered exceptional results in extraordinary times," the company said as it booked a 12% hike in full-year profit to $2.1bn. And even though gross margins were hurt by escalating product costs, these were offset by rising revenues pretty much across the board.

The athletic shoe and clothing firm now expects to generate sales of between $28bn and $30bn by 2015, up from the earlier target of $27bn forecast in May last year.

But the UK high street took a further battering as retailers Jane Norman and TJ Hughes fell victim to plunging consumer confidence across the country.

Department store chain TJ Hughes called in the administrators, putting 4,000 jobs at risk at its 57 stores nationwide. While women's fashion retailer Jane Norman managed to sell 33 of its 94 stores to fellow retailer Edinburgh Woollen Mills, but leaves more than 1,000 jobs under threat.

While retailers and brands are faced with rising product prices, Chinese clothing makers are also being squeezed by soaring wages and an appreciating local currency - forcing them to make a tough choice between keeping clients or making profits. So far the answer seems to be clients.

Winning the battle against supply chain inflation requires a holistic approach to sourcing, new research says, making it an integral part of the whole process rather than focusing on the individual 'links' of the supply chain in isolation. The research also reveals the real cost of doing business in 45 countries, helping companies to benchmark the competitiveness of their own sourcing.

Meanwhile, the conclusion of the latest round of negotiations on the Trans-Pacific Partnership (TPP) has prompted a group of US apparel and retail industry stakeholders to call for the inclusion of a market-opening apparel agreement as part of the pact. The groups believe apparel rules of origin are a key element in the overall success of the accord - and that new trade and investment opportunities will be limited without a solid agreement on apparel.


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