Nike aims for revenues of $27 billion
07/05/2010
Nike has launched a new growth strategy incorporating all its brands and businesses across the globe. During a recent investor meeting in New York, the company announced a revenue target of $27 billion by the end of fiscal 2015 based on growth expectations across its portfolio.
“We’ve never been more inspired, innovative and aligned to achieve our goals,” said Nike president and CEO, Mark Parker. “We have powerful competitive advantages in our portfolio: innovative and compelling products; brands that are distinct and relevant to their consumers; and the world’s greatest athletes and teams. Our focus is to build, fuel and accelerate the power of our portfolio.”
The Nike is the most powerful asset in its portfolio, accounting for approximately 85% of total revenue. However, its other brands are also gaining market share. “With our acquisition of Umbro, Nike has extended its position as the biggest football company in the world,” Mr Parker said. “Hurley continues to outperform everyone in its market; Cole Haan has tremendous opportunity for growth; and Converse, nearly a $1 billion business, has developed strategies to double its revenue by 2015.”
Within the Nike brand, action sports, which comprises Nike 6.0 and Nike SB, is the fastest growing category. The company expects to double its current estimated $390 million business by 2015. Its athletic training segment started more than 20 years ago with the advent of Nike cross training. This business is currently estimated at $1.4 billion, driven by innovations such as its Pro base layer apparel and Trainer1 shoe.
Basketball is led by the strength of the Jordan Brand, with excellent opportunities in the US and China. The business currently attracts $1.7 billion in revenue. Nike brand football revenues currently reach $1.7 billion and the company is launching its largest-ever presence at a World Cup including new footwear, national team kits, and Nike Football+ this year.
Running enjoys revenues of approximately $2.1 billion, driven by innovations such as Flywire, Lunar Cushioning, and Nike+ enabled footwear. Meanwhile sportswear is the company’s largest category with revenues of about $4.9 billion. The women’s training segment is reporting sales of nearly $740 million.
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