Tulsa World: Nike jumps into China

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Nike jumps into China
"Swoosh!" describes the sound heard over China as Nike (NYSE: NKE) reorganized itself in August to better exploit opportunities it sees there.

Nike marked a big year for its presence in China during fiscal 2009. Year-over-year revenue grew by 22 percent in China, while growing only 2 percent in the United States. The company's CEO called the Beijing Olympics "the biggest win of all" for Nike. Jin Lee / Bloomberg News

By MOTLEY FOOL
Published: 11/2/2009 2:21 AM
Last Modified: 11/2/2009 4:44 AM

Previously, China was part of Nike's Asia Pacific operating segment, encompassing 13 countries. Now, Greater China has become its own operating unit, as Nike focuses on China's youth.

At the company's annual shareholders' meeting in late September, Nike President and CEO Mark Parker called the Olympics in Beijing "the biggest win of all" for Nike in fiscal 2009. For 2009, Nike's revenue in China grew by 22 percent year over year, on a currency-neutral basis.

By comparison, its revenue growth in the U.S. for the same period was only 2 percent. However, during a year of economic crisis, Nike's having grown revenue at all reflects a fierce global competitor.

In terms of total revenue, net income and operating margins, Nike is the clear winner among its competitors, with a strategy to boost margins by eliminating its least-popular styles.

The company has 600 to 700 styles in the works at any one time. According to Parker, "that's too many ... we're really trying to edit the product down to fewer and better product."

As Nike continues to promote events such as "The Nike+ Human Race," it is sure to attract more and more Chinese youth. Last year, the race featured 780,000 participants worldwide. By MOTLEY FOOL

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	Report Comment Tulsan since '72, Tulsa (11/2/2009 10:06:45 AM) Nike focuses on China's youth. As in soon to be child labor shoe factory?
	Report Comment Daniel Day Simpson, Edmond (11/2/2009 11:56:07 AM) Why in hell's dump truck did I have to ship shoes to a relative who lives right in the middle of China? He could not get them over there and I had to order them from Amazon dawt cawm. They arrived with the obligatory "made in China" label. Go figure!

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