Nike fights with a decline in profits: the new boss should tear the helm around!

Nike fights with a decline in profits: the new boss should tear the helm around!

The sporting goods group Nike is currently faced with considerable financial difficulties. The company always recorded a significant drop in sales during the high -frequency summer Olympics, which still exacerbates the already tense market conditions. In the first business quarter, which was completed at the end of August, the proceeds shrank by an impressive ten percent compared to the previous year and was only $ 11.6 billion. These numbers are alarming, especially since the profit by a whopping 28 percent to $ 1.05 billion, which corresponds to around 950 million euros, fell.

nike apparently sees the solution to his problems in a change of leadership. Former top manager Elliott Hill, who was retired until recently, will take over the management of the company in mid-October. Hill has valuable experience, especially in a market that is characterized by strong competition. He has returned as a leadership to take over the rudder in stormy times and to bring a breath of fresh air to the corporate strategy.

changes in the sales strategy

Hill's strategy of his predecessor John Donahoe, which was initially successfully assessed, who aimed to strengthen the direct sales, now shows her dark sides. One of the most remarkable bends of this decision was the loss to the shelves in the shops, which was now taken by competitive products. As a result, competitors have become more visible to consumers, which has a negative impact on Nike.

In the past quarter, the sales balance sheet proved to be challenging in the course of this change. In both sales channels, first in the online business and then in the physical Nike store, a decline in sales was documented. The online business even recorded a dramatic decline of 20 percent and brought direct sales back by 13 percent to $ 4.7 billion. However, it remains positive that the sales figures in the Nike stores counted a slight increase in one percent.

In wholesale, however, the numbers were not better. Here sales fell 8 percent to $ 6.4 billion. These developments illustrate the complex need for action that the company faces. The challenge of staying innovative in a constantly changing market environment could also burden Nike.

Another aspect of the current Situation is the savings program, which was launched by Donahoe. The aim is to reduce the costs by around two billion dollars. Part of these savings is achieved by reducing jobs, with about two percent of the workforce affected. This measure is another attempt to maintain competitiveness in an increasingly difficult market.

The strategic decisions, especially with regard to the change of management and the savings program, can also be seen in response to the current market conditions. It remains to be seen how effective these measures will ultimately be and whether they are sufficient to lead Nike out of the current crisis. The next few months are crucial and will show whether the new approaches and the return of Elliott Hill can bring the turn for the company.