Nike said it expects costs to increase by around $ 1 billion (728 million pounds sterling) following Donald Trump’s pricing war while the sportswear seeking to reduce its manufacture in China.
The business value of the company has dropped a third in the past year and has taken up measures to reduce the blow, including the increase in prices in the United States and supply to other countries.
“These prices represent a significant new cost,” said Matthew Friend, Nike financial director. “With the new rates of price in place today, we estimate a gross gradual cost increase for Nike about $ 1 billion. We intend to fully alleviate the impact of these winds contrary over time. »»
Last year Almost 60% of all Nike brand clothes was made in Vietnam, China and Cambodia. Vietnam, Indonesia and China Made 95% of all Nike shoes last year.
“We have solid relationships with our factory partners, and our management team is experienced in management by disturbances,” said Friend. “Nike has always been one of the main tasks of the United States. We will optimize our supply mixture and allocate production differently from country to country to alleviate the new wind from the United States. ”
He said that the manufacturing capacity and capacity are still important for the company, despite the rate of price of 60% imposed by the United States, representing around 16% of shoes imports to America.
A friend said the company tried to minimize the impact on consumers.
However, he added that the company would implement an “increase in surgical prices” in the United States from this fall and aims to reduce general costs thanks to the “reduction in corporate costs”.
Friend’s comments came while Nike has published his worst quarterly benefit in more than three years, while revenues fell 12% to 11.1 billion dollars in the three months at the end of May.
Elliott Hill, the director general of Nike, said: “The results are where we have planned. That said, we are not satisfied with where we are.”
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Mamta Valechha, analyst at Quilter Cheviot, said: “Nike continues to collapse, with his fourth quarter the worst in at least two decades.”
She said that the figures indicated that Nike “could almost be at the bottom of the rocks”, adding: “It was a difficult period for Nike after the pandemic, and that the threat of prices simply does not help the situation for the company.”