March 21, 2011 BY John Kim
Keeping up the sneakerhead’s habit is certainly an expensive one, and the footwear giant that spearheads the sneaker sub-culture is about to make it a little bit harder for us all. Due to rising costs of cotton, oil, and transportation, Nike, in a statement made by CFO Don Blair during a conference call to analysts on March 18th, will offset those increased costs by raising prices “across the board”. Nike’s financial year ends on May 31st, which could signify these higher prices arriving soon, and with Nike’s Global Growth Strategy of blossoming into a $27 billion company by 2015, the sneaker-buying public has no choice but to pony up the extra dollars, or give up the game for good. The good news is that Nike has the world’s most creative CEO in Mark Parker, so hopefully the minds behind the swoosh can devise alternative counteractive solutions to rising costs of materials without hurting the consumer. What are your thoughts? The full article is after the jump, so give it a quick look and let us know what you think. via marketingweek/deftronic
Nike says the price of its trainers and clothes will increase this year to offset rising costs.
The sportswear company, which owns the Nike, Umbro and Converse brands, warned that the rising cost of cotton, oil and transportation will squeeze profit margins.
Nike’s chief financial officer Don Blair said in a conference call to analysts yesterday (18 March) that until now price increases had been in specific markets on particular product lines but from its next financial year prices would increase “across the board”. The company’s current financial year ends 31 May.
Blair was speaking as the company reported that net profit for its third quarter increased 5% to $523m. Revenue rose 7% to $5.1bn.
The gains were driven by a 21% revenue bump in China and a 19% gain in emerging markets, which partly offset a 2% fall in earnings from Western Europe.
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