Sports equipment company Nike recorded a significant drop in sales in the Olympic summer season. In the first quarter, which ended in late August, revenue fell ten percent year-on-year to $11.6 billion. The bottom line is that profits fell 28 percent to 1.05 billion dollars (950 million euros). Nike wants to solve this problem, among other things, by changing the boss: in mid-October, former top manager Elliott Hill will return from retirement to competitor Adidas and take over the top job.
His predecessor John Donahoe's strategy included relying more on direct sales. However, the downside is that the shelf space that Nike provides in stores is filled with competing products. This makes its competitors more visible to consumers.
In the last quarter, Nike weakened in both sales channels. Direct sales fell 13 percent to $4.7 billion. The trigger was a decline in online business by 20 percent, while Nike stores increased by one percent. Wholesale sales fell 8 percent to $6.4 billion.
Nike is currently undergoing a savings program launched by Donahoe that aims to cut costs by around $2 billion. About two percent of jobs were affected.