In Fashion Street Clothing And Cheap Fashion, Nike'S Position Is Being Eaten By Adidas And H&M.

< p > Nike (Nike) has formulated an ambitious global growth plan.

The company has set up a five year plan to increase sales by 40% to 27 billion dollars.

At present, the plan has entered its third year.

Nike also aims to increase its profit by 15% a year by 2015.

This means that the company must expand significantly outside the US, such as China and Brazil.

Nike has become the leader of the Chinese sports "a target=" _blank "href=" //www.sjfzxm.com/ "clothing" /a "market, with a market share of 12%. However, it faces fierce competition from Adidas (expanding the location information) (Adidas, market share of 11.2%) and Chinese rivals such as Lining.

China is Nike's second largest market after the US.

The company hopes to achieve two digit sales growth in Brazil, India and other developing countries and the central and Eastern European market, so that revenues will grow by 3 billion to 3 billion 500 million dollars.

Nike is also expanding its retail business to achieve higher operating margins and faster market access to new products.

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< p > < strong > in China's problem < /strong > < /p >

< p > before, it seems that the a href= "http://sjfzxm.com/news/index_x.asp" > Nike < /a > needs to open up new stores and wait for the new middle class customers to come shopping.

Unfortunately, this is no longer the case.

In fashion street clothing and parity fashion, Nike's position is being eaten up by Adidas and H&M respectively.

More than a year ago, Nike was very optimistic about the Chinese market and predicted that its sales in China would double in four years to $4 billion.

But now, Nike's sales in China will decline in the next two quarters, which means sales will decline for the five consecutive quarter.

So far, Nike has achieved a 18% sales growth in the US market, which has offset the poor performance in the Chinese market.

The stock continued to perform well, up more than 20% this year, higher than the 18% increase in the S & P 500 index.

Nike blamed the problem on China's GDP slowdown and consumer preferences, but still believes its strategy is most appropriate for the market.

In addition, Adidas has stepped up its discount rate to get rid of its backlog.

Nike also realized that it could no longer rely on its brand power and had to provide consumers with better sportswear.

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< p > < span id= "1375759692673S" style= "display: none" > /span > latest financial situation < /p >

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< p > Nike announced its satisfactory fourth quarter results in fiscal 2013.

Sales increased by 7% to $6 billion 700 million, and operating profit margin increased by 1.1 percentage points to 44%.

Profits grew by 22% to $668 million.

Earnings per share were $0.76, up 0.02 from analysts' expectations, up 27% from the same period last year.

Dividend payout rate has been raised again and dividend yield is around 1.3%.

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< p > < strong > the importance of CONVERSE brand < /strong > /p >

< p > CONVERSE is now worth $1 billion, and was bought by Nike in 2003 at a price of only US $305 million.

Now it seems that this is a successful investment, because the brand's annual revenue for Nike is 4 times that of the purchase price.

CONVERSE's total revenue in 2012 reached $1 billion 300 million.

Nike does not often buy other brands as a supplement to its own brand.

In fact, the company sold UMBRO (Umbro) and Cole Haan to focus on 4 brands, namely Nike, Jordan, CONVERSE and Hurley.

Nike also wisely decided to let CONVERSE operate independently and cater to its own large fans, and did not attempt to impose Nike logo on CONVERSE products.

Nowadays, the annual compound growth rate of CONVERSE brand is close to 13%, far higher than that of Nike brand 5.3%.

In addition to providing brand diversity, CONVERSE is also suitable for those who buy cheap sports less than a target= "_blank" href= "//www.sjfzxm.com/" > strong > shoes < /strong > /a.

CONVERSE is not only moderately priced, but also of excellent quality and attractive appearance.

In fact, I dare say many customers do not know that the brand belongs to Nike.

Nike enables CONVERSE to operate independently, which proves Nike has realized the importance of the brand in its strategic assets.

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< p > < strong > conclusion < /strong > < /p >.

The performance of Nike P was 10% higher than analysts' consensus in four consecutive quarters.

But at present, the new investors of the company should put the stock on the watch list until the problem in China is solved and the disposable expenditure of developing countries is rising.

At the same time, if you are a shareholder, you should continue to hold the existing position.

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