Nike Inc. (NKE) has been affected by the COVID-19 crisis, like many other clothing and footwear manufacturers. Because of the pandemic, the company’s quarterly profits fell by almost 40 percent. Nike was however, eventually able to recover losses, expand margins, and deliver strong e-Commerce growth. The organization is expected to be able to come out of the present crisis in a better position than its rivals.
The company’s revenue was estimated to hit $50 billion in 2020, according to Nike’s original strategy, announced back in 2015. However also due to the COVID-19 pandemic, the goal was not met. The company, however does not fully abandon the strategy, but only extends the terms. Nike depends, first of all on more marginal direct sales and e-Commerce. Nike would not hesitate to co-operate with department stores at the same time. Several dozen retail stores, such as Nordstrom and Foot Locker, will be prioritized by the group, which could boost brand revenue by coordinating Autonomous Nike spaces within their salesrooms.
A significant part of Nike’s growth plan is investing in emerging technology. With a marketing campaign that attracts subscribers which constantly look for fresh deals and special promotions, the SNKRS app has created strong growth. In order to identify patterns and efficiently change inventory and logistics, Nike also acquired Celect’s demand forecasting technology.
The pent-up demand created during the COVID-19 pandemic and the forced suspension of social activity could profit Nike in 2021. Again the economic rebound would bring back demand for outdoor clothes, as well as outdoor sports clothing and gyms.
By 2025, these variables could provide Nike with annual sales of about $60 billion. At the same time, Nike’s profit will also increase due to the rise in the share of direct sales and demand for creative, high-margin new products.
Nike Inc. (NKE) stock closed at $135.44 in December 2 trading session while it has gained more than 33% since start of the year.