Sat, Jun 17, 2017 - Page 10 News List

Nike to cut sneaker styles and 2% of worldwide jobs

AP, NEW YORK

Shoppers on Thursday browse in a Nike store in New York City’s SoHo.

Photo: AFP

Nike Inc wants to be more nimble on its feet.

The sneaker maker on Thursday said that it plans to focus on its best-selling sneakers, slash the number of styles it offers and sell more shoes directly to customers online as part of a restructuring in which it is also to cut about 1,400 jobs.

The Beaverton, Oregon-based company said the layoffs represent about 2 percent of its 70,000 employees worldwide.

It declined to provide additional details about the cuts.

Nike said the moves would help it offer products to customers faster as it is facing increasing competition from smaller brands and premium labels.

Another problem: The running and basketball shoes Nike is famous for might be outdated.

More people are choosing fashion over function, with sales of classic sneakers industry-wide last year climbing 26 percent, an NPD Group Inc report said.

Meanwhile, sales of performance running sneakers were flat and sales of performance basketball sneakers dropped, the report said.

“Nike missed the fashion shift away from performance basketball to retro,” NPD sports industry analyst Matt Powell said. “They still have not caught up.”

Adidas AG, whose casual Stan Smith shoes have become popular again, has made a push to increase sales in the US.

The German company last month said that first-quarter revenue in North America jumped 31 percent from a year earlier.

On the high end, Neiman Marcus last week told investors that sneakers, with an average retail price of US$360 per pair, have become a significant business as shoppers focus on a more casual lifestyle.

Nike, known for its swoosh logo, is also to make its sneaker selling apps available in more countries at a time when online sales mean many big retailers and department stores are closing stores.

“We’re getting even more aggressive in the digital marketplace,” Nike CEO Mark Parker said.

Nike said a main focus would be the 12 key cities in 10 countries that it expects to represent more than 80 percent of its projected growth through 2020.

Those cities are New York, Los Angeles, London, Paris, Mexico City, Tokyo, Seoul, Shanghai, Beijing and Milan, Italy.

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