Nike, Inc.

A Nike Factory Store in Vaughan Mills

Nike has acquired and sold several apparel and footwear companies over the course of its history. Its first acquisition was the upscale footwear company Cole Haan in 1988,[34] followed by the purchase of Bauer Hockey in 1994.[35] In 2002, Nike bought surf apparel company Hurley International from founder Bob Hurley.[36] In 2003, Nike paid US$309 million to acquire sneaker company Converse.[37] The company acquired Starter in 2004[38] and soccer uniform maker Umbro in 2007.[39]

In order to refocus its business lines, Nike began divesting itself of some of its subsidiaries in the 2000s.[40] It sold Starter in 2007[38] and Bauer Hockey in 2008.[35] The company sold Umbro in 2012 [41] and Cole Haan in 2013.[42] As of 2020, Nike owns only one subsidiary: Converse Inc.

Nike was made a member of the Dow Jones Industrial Average in 2013, when it replaced Alcoa.[43]

On December 19, 2013, Nike's quarterly profit rose due to a 13 percent increase in global orders for merchandise since April of that year. Future orders of shoes or clothes for delivery between December and April, rose to $10.4 billion. Nike shares (NKE) rose 0.6 percent to $78.75 in extended trading.[44]

In November 2015, Nike announced it would initiate a $12 billion share buyback, as well as a two-for-one stock split, with shares to begin trading at the decreased price on December 24.[45] The split will be the seventh in company history.

In June 2018, Nike announced it would initiate a $15 billion share buyback over four years, to begin in 2019 upon completion of the previous buyback program.[46]

For the fiscal year 2018, Nike reported earnings of US$1.933 billion, with an annual revenue of US$36.397 billion, an increase of 6.0% over the previous fiscal cycle. Nike's shares traded at over $72 per share, and its market capitalization was valued at over US$114.5 billion in October 2018.[47]

In March 2020, Nike reported a 5% drop in Chinese sales associated with stores' closure due to the COVID-19 outbreak. It was the first decrease in six years. At the same time, the company's online sales grew by 36% during Q1 of 2020. Also, the sales of personal training apps grew by 80% in China.[48]

Notes

Nike Zoom Elite 2 athletic shoe

A pair of Nike Air Jordan I basketball shoes

Nike produces a wide range of sports equipment. Their first products were track running shoes. They currently also make shoes, jerseys, shorts, cleats, baselayers, etc. for a wide range of sports, including track and field, baseball, ice hockey, tennis, association football (soccer), lacrosse, basketball, and cricket. Nike Air Max is a line of shoes first released by Nike, Inc. in 1987. Additional product lines were introduced later, such as Air Huarache, which debuted in 1992. The most recent additions to their line are the Nike 6.0, Nike NYX, and Nike SB shoes, designed for skateboarding. Nike has recently introduced cricket shoes called Air Zoom Yorker, designed to be 30% lighter than their competitors'.[49] In 2008, Nike introduced the Air Jordan XX3, a high-performance basketball shoe designed with the environment in mind.

Nike sells an assortment of products, including shoes and apparel for sports activities like association football,[50] basketball, running, combat sports, tennis, American football, athletics, golf, and cross training for men, women, and children. Nike also sells shoes for outdoor activities such as tennis, golf, skateboarding, association football, baseball, American football, cycling, volleyball, wrestling, cheerleading, aquatic activities, auto racing, and other athletic and recreational uses. Nike recently teamed up with Apple Inc. to produce the Nike+ product that monitors a runner's performance via a radio device in the shoe that links to the iPod nano. While the product generates useful statistics, it has been criticized by researchers who were able to identify users' RFID devices from 60 feet (18 m) away using small, concealable intelligence motes in a wireless sensor network.[51][52]

In 2004, Nike launched the SPARQ Training Program/Division.[53] Some of Nike's newest shoes contain Flywire and Lunarlite Foam to reduce weight.[54] The Air Zoom Vomero running shoe, introduced in 2006 and currently in its 11th generation, featured a combination of groundbreaking innovations including a full-length air cushioned sole,[55] an external heel counter, a crashpad in the heel for shock absorption, and Fit Frame technology for a stable fit.[56]

Nike Vaporfly

Nike Vaporfly cut in half to show the different layers that make up the base of the shoe. The dark grey line shows the carbon fiber plate.

Nike Cleat

The Nike Vaporfly first came out in 2017 and their popularity, along with its performance, prompted a new series of running shoes.[57][58] The Vaporfly series has a new technological composition that has revolutionized long-distance running since studies have shown that these shoes can improve run times up to 4.2%.[58] The composition of the sole contains a foamy material, Pebax, that Nike has altered and now calls it ZoomX (which can be found in other Nike products as well). Pebax foam can also be found in airplane insulation and is "squishier, bouncier, and lighter" than foams in typical running shoes.[58] In the middle of the ZoomX foam there is a full-length carbon fiber plate "designed to generate extra spring in every step".[58] At the time of this writing Nike had just released its newest product from the Vaporfly line, the Nike ZoomX Vaporfly NEXT%, which was marketed as "the fastest shoe we’ve ever made" using Nike's "two most innovative technologies, Nike ZoomX foam and VaporWeave material".[59]

Nike Elite no-show socks with cushioned sole

The Nike brand, with its distinct V-shaped logo, quickly became regarded as a status symbol[60] in modern urban fashion and hip-hop fashion[61] due to its association with success in sport.[62] Beginning in the 1980s, various items of Nike clothing became staples of mainstream American youth fashion, especially tracksuits, shell suits, baseball caps, Air Jordans, Air Force 1's, and Air Max running shoes[63] with thick, air cushioned rubber soles and contrasting blue, yellow, green, white, or red trim.[64] Limited edition sneakers and prototypes with a regional early release were known as Quickstrikes,[65] and became highly desirable items[66] for teenage members of the sneakerhead subculture.[67]

By the 1990s and 2000s, American and European teenagers[68] associated with the preppy[69] or popular clique[70] began combining these sneakers,[71] leggings, sweatpants, crop tops,[72] and tracksuits with regular casual chic[73] street clothes[74] such as jeans, skirts, leg warmers, slouch socks, and bomber jackets. Particularly popular were the unisex spandex Nike Tempo compression shorts[75] worn for cycling and running, which had a mesh lining, waterproofing, and, later in the 2000s, a zip pocket for a Walkman or MP3 player.[76]

From the late 2000s into the 2010s, Nike Elite basketball socks began to be worn as everyday clothes by hip-hop fans and young children.[77] Originally plain white or black, these socks had special shock absorbing cushioning in the sole[78] plus a moisture wicking upper weave.[79] Later, Nike Elite socks became available in bright colors inspired by throwback basketball uniforms,[80] often with contrasting bold abstract designs, images of celebrities,[81] and freehand digital print[82] to capitalise upon the emerging nostalgia for 1990s fashion.

In 2015, a new self-lacing shoe was introduced. Called the Nike Mag, which are replicas of the shoes featured in Back to the Future Part II, it had a preliminary limited release, only available by auction with all proceeds going to the Michael J. Fox Foundation.[83] This was done again in 2016.[84]

Nike have introduced a premium line, focused more on streetwear than sports wear called NikeLab.[85]

In March 2017, Nike announced its launch of a plus-size clothing line, which will feature new sizes 1X through 3X on more than 200 products.[86] Another significant development at this time was the Chuck Taylor All-Star Modern, an update of the classic basketball sneaker that incorporated the circular knit upper and cushioned foam sole of Nike's Air Jordans.[87]

On July 23, 2019 a pair of Nike Inc. running shoes sold for $437,500 at a Sotheby's auction. The so-called "Moon Shoes" were designed by Nike co-founder and track coach Bill Bowerman for runners participating in the 1972 Olympics trials. The buyer was Miles Nadal, a Canadian investor and car collector, who had just paid $850,000 for a group of 99 rare of limited collection pairs of sport shoes. The purchase price was the highest for one pair of sneakers, the previous record being $190,373 in 2017 for a pair of signed Converse shoes in California, said to have been worn by Michael Jordan during the 1984 basketball final of the Olympics that year.[88]

In the 1990s, Nike received criticism[94] for its use of sweatshops. Later on that year, many protests occurred in big cities such as in Washington, DC and Boston in order to show public outcry for Nikes use of child labor and sweatshops. Nike has been criticized for contracting with factories (known as Nike sweatshops) in countries such as China, Vietnam, Indonesia and Mexico. Vietnam Labor Watch, an activist group, has documented that factories contracted by Nike have violated minimum wage and overtime laws in Vietnam as late as 1996, although Nike claims that this practice has been stopped.[95] The company has been subject to much critical coverage of the often poor working conditions and exploitation of cheap overseas labor employed in the free trade zones where their goods are typically manufactured. Sources for this criticism include Naomi Klein's book No Logo and Michael Moore documentaries.

Campaigns have been taken up by many colleges and universities, especially anti-globalisation groups, as well as several anti-sweatshop groups such as the United Students Against Sweatshops.[96]

As of July 2011, Nike stated that two-thirds of its factories producing Converse products still do not meet the company's standards for worker treatment. A July 2011 Associated Press article stated that employees at the company's plants in Indonesia reported constant abuse from supervisors.[97]

During the 1990s, Nike faced criticism for the use of child labor in Cambodia and Pakistan in factories it contracted to manufacture soccer balls. Although Nike took action to curb or at least reduce the practice, they continue to contract their production to companies that operate in areas where inadequate regulation and monitoring make it hard to ensure that child labor is not being used.[98]

In 2001, a BBC documentary uncovered occurrences of child labor and poor working conditions in a Cambodian factory used by Nike.[99] The documentary focused on six girls, who all worked seven days a week, often 16 hours a day.

In April 2014, one of the biggest strikes in mainland China took place at the Yue Yuen Industrial Holdings Dongguan shoe factory, producing amongst others for Nike. Yue Yuen did underpay an employee by 250 yuan (40.82 US Dollars) per month. The average salary at Yue Yuen is 3000 yuan per month. The factory employs 70,000 people. This practice was in place for nearly 20 years.[100][101][102]

On November 5, 2017, the Paradise Papers, a set of confidential electronic documents relating to offshore investment, revealed that Nike is among the corporations that used offshore companies to avoid taxes.[103][104][105]

Appleby documents detail how Nike boosted its after-tax profits by, among other maneuvers, transferring ownership of its Swoosh trademark to a Bermudan subsidiary, Nike International Ltd. This transfer allowed the subsidiary to charge royalties to its European headquarters in Hilversum, Netherlands, effectively converting taxable company profits to an account payable in tax-free Bermuda.[106] Although the subsidiary was effectively run by executives at Nike's main offices in Beaverton, Oregon—to the point where a duplicate of the Bermudan company's seal was needed—for tax purposes the subsidiary was treated as Bermuda. Its profits were not declared in Europe and came to light only because of a mostly unrelated case in US Tax Court, where papers filed by Nike briefly mention royalties in 2010, 2011 and 2012 totaling $3.86 billion.[106] Under an arrangement with Dutch authorities, the tax break was to expire in 2014, so another reorganization transferred the intellectual property from the Bermudan company to a Dutch commanditaire vennootschap or limited partnership, Nike Innovate CV. Dutch law treats income earned by a CV as if it had been earned by the principals, who owe no tax in the Netherlands if they do not reside there.[106]

In September 2018, Nike announced it had signed former American football quarterback Colin Kaepernick, noted for his controversial decision to kneel during the playing of the US national anthem, to a long-term advertising campaign.[107] According to Charles Robinson of Yahoo! Sports, Kaepernick and Nike agreed to a new contract despite the fact Kaepernick has been with the company since 2011 and said that "interest from other shoe companies" played a part in the new agreement. Robinson said the contract is a "wide endorsement" where Kaepernick will have his own branded line including shoes, shirts, jerseys and more. According to Robinson, Kaepernick signed a "star" contract that puts him level with a "top-end NFL player" worth millions per year plus royalties.[108] In response, some people set fire to their own Nike-branded clothes and shoes or cut the Nike swoosh logo out of their clothes, and the Fraternal Order of Police called the advertisement an "insult";[109][110][111] others, such as LeBron James,[112] Serena Williams,[113] and the National Black Police Association,[111] praised Nike for its campaign. The College of the Ozarks removed Nike from all their athletic uniforms in response.[114]

During the following week, Nike's stock price fell 2.2%, even as online orders of Nike products rose 27% compared with the previous year.[115] In the following three months, Nike reported a rise in sales.[116]

In July 2019, Nike released a shoe featuring a Betsy Ross flag called the Air Max 1 Quick Strike Fourth of July trainers. The trainers were designed to celebrate Independence Day. The model was subsequently withdrawn after Colin Kaepernick told the brand he and others found the flag offensive because of its association with slavery.[117][118][119]

Nike's decision to withdraw the product drew criticism from Arizona's Republican Governor, Doug Ducey, and Texas's Republican Senator Ted Cruz.[120] Nike's decision was praised by others due to the use of the flag by white nationalists,[119] but the Anti-Defamation League's Center on Extremism has declined to add the flag to its database of "hate symbols."[121]

U.S. Vice President Mike Pence criticized Nike for "siding with the Chinese Communist Party and silencing free speech".[122]

On January 31, 2020, the World Athletics issued new guidelines concerning shoes to be used in the upcoming Tokyo 2020 Olympics.[123] These updates came in response to criticisms concerning technology in the Nike Vaporfly running shoes, which had been submitted beginning around 2017–2018.[124] These criticisms stated that the shoes provided athletes with an unfair advantage over their opponents and some critics considered it to be a form of mechanical doping.[58][125] According to Nike funded research, the shoes can improve efficiency by up to 4.2%[58] and runners who have tested the shoe are saying that it causes reduced soreness in the legs; sports technologist Bryce Dyer attributes this to the ZoomX and carbon fiber plate since it absorbs the energy and "spring[s] runners forward".[125] Some athletes, scientists, and fans have compared this to the 2008 LAZR swimsuit controversy.[126]

Some of the major changes in the guidelines that have come about as a result of these criticisms include that the "sole must be no thicker than 40mm" and that "the shoe must not contain more than one rigid embedded plate or blade (of any material) that runs either the full length or only part of the length of the shoe. The plate may be in more than one part but those parts must be located sequentially in one plane (not stacked or in parallel) and must not overlap". The components of the shoes are not the only thing that had major changes; starting April 30, 2020, "any shoe must have been available for purchase by any athlete on the open retail market (online or in store) for a period of four months before it can be used in competition".[123] Prior to these new guidelines World Athletics reviewed the Vaporfly shoes and "concluded that there is independent research that indicates that the new technology incorporated in the soles of road and spiked shoes may provide a performance advantage" and that it recommends further research to "establish the true impact of [the Vaporfly] technology."[123]

In 1982, Nike aired its first three national television ads, created by newly formed ad agency Wieden+Kennedy (W+K), during the broadcast of the New York Marathon.[133] The Cannes Advertising Festival has named Nike its Advertiser of the Year in 1994 and 2003, making it the first company to receive that honor twice.[134]

Nike also has earned the Emmy Award for best commercial in 2000 and 2002. The first was for "The Morning After," a satirical look at what a runner might face on the morning of January 1, 2000, if every dire prediction about the Y2K problem came to fruition.[135] The second was for a 2002 spot called "Move," which featured a series of famous and everyday athletes in a variety of athletic pursuits.[136]

Nike was criticized for its use of the Beatles song "Revolution" in a 1987 commercial against the wishes of Apple Records, the Beatles' recording company. Nike paid US$250,000 to Capitol Records Inc., which held the North American licensing rights to the recordings, for the right to use the Beatles' rendition for a year.[137]

That same year, Apple Records sued Nike Inc., Capitol Records Inc., EMI Records Inc. and Wieden+Kennedy for $15 million.[137] Capitol-EMI countered by saying the lawsuit was "groundless" because Capitol had licensed the use of "Revolution" with the "active support and encouragement of Yoko Ono, a shareholder and director of Apple Records."

Nike discontinued airing ads featuring "Revolution" in March 1988. Yoko Ono later gave permission to Nike to use John Lennon's "Instant Karma" in another advertisement.

Nike was an early adopter of internet marketing, email management technologies, and using broadcast and narrowcast communication technologies to create multimedia marketing campaigns.

In late June 2005, Nike received criticism from Ian MacKaye, owner of Dischord Records, guitarist/vocalist for Fugazi and The Evens, and front man of the defunct punk band Minor Threat, for appropriating imagery and text from Minor Threat's 1981 self-titled album's cover art in a flyer promoting Nike Skateboarding's 2005 East Coast demo tour.[138]

On June 27, Nike Skateboarding's website issued an apology to Dischord, Minor Threat, and fans of both and announced that they have tried to remove and dispose of all flyers. They stated that the people who designed it were skateboarders and Minor Threat fans themselves who created the advertisement out of respect and appreciation for the band.[139] The dispute was eventually settled out of court between Nike and Minor Threat.

Niketown at Oxford Circus, London

As part of the 6.0 campaign, Nike introduced a new line of T-shirts that include phrases such as "Dope", "Get High" and "Ride Pipe" – sports lingo that is also a double entendre for drug use. Boston Mayor Thomas Menino expressed his objection to the shirts after seeing them in a window display at the city's Niketown and asked the store to remove the display. "What we don't need is a major corporation like Nike, which tries to appeal to the younger generation, out there giving credence to the drug issue," Menino told The Boston Herald. A company official stated the shirts were meant to pay homage to extreme sports, and that Nike does not condone the illegal use of drugs.[140] Nike was forced to replace the shirt line.[141]

In June 2015, Nike signed an 8-year deal with the NBA to become the official uniform supplier for the league, beginning with the 2017–18 season.[142] The brand took over for Adidas, who provided the uniforms for the league since 2006.[142] Unlike previous deals, Nike's logo appear on NBA jerseys – a first for the league.[142] The only exception is the Charlotte Hornets, owned by longtime Nike endorser Michael Jordan, which instead uses the Jumpman logo associated with Jordan-related merchandise.[143]