Nike, Inc. Business Information, Profile, and History
Beaverton, Oregon 97005-6453
The Nike Mission: "To bring inspiration and innovation to every athle te* in the world."
*If you have a body, you are an athlete.
History of Nike, Inc.
Founded as an importer of Japanese shoes, NIKE, Inc. (Nike) has grown to be the world's largest marketer of athletic footwear, holding a g lobal market share of approximately 37 percent. In the United States, Nike products are sold through about 22,000 retail accounts; worldwi de, the company's products are sold in more than 160 countries. Both domestically and overseas Nike operates retail stores, including Nike Towns and factory outlets. Nearly all of the items are manufactured b y independent contractors, primarily located overseas, with Nike invo lved in the design, development, and marketing. In addition to its wi de range of core athletic shoes and apparel marketed under the flagsh ip Nike brand, the company also sells footwear under the Converse, Ch uck Taylor, All Star, and Jack Purcell brands through wholly owned su bsidiary Converse Inc. and sells under the brands Starter, Shaq, and Asphalt in the discount retailer channel through another subsidiary, Exeter Brands Group LLC. The firm also sells Nike and Bauer brand ath letic equipment; Hurley surfing, skateboarding, and snowboarding appa rel and footwear; and Cole Haan brand dress and casual footwear. Nike has relied on consistent innovation in the design of its products an d heavy promotion to fuel its growth in both U.S. and foreign markets . The ubiquitous presence of the Nike brand and its Swoosh trademark led to a backlash against the company by the late 20th century, parti cularly in relation to allegations of low wages and poor working cond itions at the company's Asian contract manufacturers.
BRS Beginnings: 1960s
Nike's precursor originated in 1962, a product of the imagination of Philip H. Knight, a Stanford University business graduate who had bee n a member of the track team as an undergraduate at the University of Oregon. Traveling in Japan after finishing business school, Knight g ot in touch with a Japanese firm that made athletic shoes, the Onitsu ka Tiger Co., and arranged to import some of its products to the Unit ed States on a small scale. Knight was convinced that Japanese runnin g shoes could become significant competitors for the German products that then dominated the American market. In the course of setting up his agreement with Onitsuka Tiger, Knight invented Blue Ribbon Sports to satisfy his Japanese partner's expectations that he represented a n actual company, and this hypothetical firm eventually grew to becom e Nike, Inc.
At the end of 1963, Knight's arrangements in Japan came to fruition w hen he took delivery of 200 pairs of Tiger athletic shoes, which he s tored in his father's basement and peddled at various track meets in the area. Knight's one-man venture became a partnership in the follow ing year, when his former track coach, William Bowerman, chipped in & #36;500 to equal Knight's investment. Bowerman had long been experime nting with modified running shoes for his team, and he worked with ru nners to improve the designs of prototype Blue Ribbon Sports (BRS) sh oes. Innovation in running shoe design eventually would become a corn erstone of the company's continued expansion and success. Bowerman's efforts first paid off in 1968, when a shoe known as the Cortez, whic h he had designed, became a big seller.
BRS sold 1,300 pairs of Japanese running shoes in 1964, its first yea r, to gross $8,000. By 1965 the fledgling company had acquired a full-time employee and sales had reached $20,000. The following y ear, the company rented its first retail space, next to a beauty salo n in Santa Monica, California, so that its few employees could stop s elling shoes out of their cars. In 1967 with fast-growing sales, BRS expanded operations to the East Coast, opening a distribution office in Wellesley, Massachusetts.
Bowerman's innovations in running shoe technology continued throughou t this time. A shoe with the upper portion made of nylon went into de velopment in 1967, and the following year Bowerman and another employ ee came up with the Boston shoe, which incorporated the first cushion ed midsole throughout the entire length of an athletic shoe. Also in 1968 the company was incorporated as BRS, Inc.
Emergence of Nike: 1970s
By the end of the decade, Knight's venture had expanded to include se veral stores and 20 employees and sales were nearing $300,000. Th e company was poised for greater growth, but Knight was frustrated by a lack of capital to pay for expansion. In 1971, using financing fro m the Japanese trading company Nissho Iwai Corporation, BRS was able to manufacture its own line of products overseas, through independent contractors, for import to the United States. At this time, the comp any introduced its Swoosh trademark and the brand name Nike, the Gree k goddess of victory. These new symbols were initially affixed to a s occer shoe, the first Nike product to be sold.
A year later, BRS broke with its old Japanese partner, Onitsuka Tiger , after a disagreement over distribution, and kicked off promotion of its own products at the 1972 U.S. Olympic Trials, the first of many marketing campaigns that would seek to attach Nike's name and fortune s to the careers of well-known athletes. Nike shoes were geared to th e serious athlete, and their high performance carried with it a high price.
In their first year of distribution, the company's new products gross ed $1.96 million and the corporate staff swelled to 45. In additi on, operations were expanded to Canada, the company's first foreign m arket, which would be followed by Australia, in 1974.
Bowerman continued his innovations in running-shoe design with the in troduction of the Moon shoe in 1972, which had a waffle-like sole tha t had first been formed by molding rubber on a household waffle iron. This sole increased the traction of the shoe without adding weight.
In 1974 BRS opened its first U.S. plant, in Exeter, New Hampshire. Th e company's payroll swelled to 250, and worldwide sales neared $5 million by the end of 1974. This growth was fueled in part by aggres sive promotion of the Nike brand name. The company sought to expand i ts visibility by having its shoes worn by prominent athletes, includi ng tennis players Ilie Nastase and Jimmy Connors. At the 1976 Olympic Trials these efforts began to pay off as Nike shoes were worn by ris ing athletic stars.
The company's growth had truly begun to take off by this time, riding the boom in popularity of jogging that took place in the United Stat es in the late 1970s. BRS revenues tripled in two years to $14 mi llion in 1976, and then doubled in just one year to $28 million i n 1977. To keep up with demand, the company opened new factories, add ing a stitching plant in Maine and additional overseas production fac ilities in Taiwan and Korea. International sales were expanded when m arkets in Asia were opened in 1977 and in South America the following year. European distributorships were lined up in 1978.
Nike continued its promotional activities with the opening of Athleti cs West, a training club for Olympic hopefuls in track and field, and by signing tennis player John McEnroe to an endorsement contract. In 1978 the company changed its name to Nike, Inc. The company expanded its line of products that year, adding athletic shoes for children.
By 1979 Nike sold almost half the running shoes bought in the United States, and the company moved into a new world headquarters building in Beaverton, Oregon. In addition to its shoe business, the company b egan to make and market a line of sports clothing, and the Nike Air s hoe cushioning device was introduced.
1980s Growth Through International Expansion and Aggressive Market ing
By the start of the 1980s, Nike's combination of groundbreaking desig n and savvy and aggressive marketing had allowed it to surpass the Ge rman athletic shoe company adidas AG, formerly the leader in U.S. sal es. In December 1980, Nike went public, offering two million shares o f stock. With the revenues generated by the stock sale, the company p lanned continued expansion, particularly in the European market. In t he United States, plans for a new headquarters on a large, rural camp us were inaugurated, and an East Coast distribution center in Greenla nd, New Hampshire, was brought on line. In addition, the company boug ht a large plant in Exeter, New Hampshire, to house the Nike Sport Re search and Development Lab and also to provide for more domestic manu facturing capacity. The company had shifted its overseas production a way from Japan at this point, manufacturing nearly four-fifths of its shoes in South Korea and Taiwan. It established factories in mainlan d China in 1981.
By the following year, when the jogging craze in the United States ha d started to wane, half of the running shoes bought in the United Sta tes bore the Nike trademark. The company was well insulated from the effects of a stagnating demand for running shoes, however, because it gained a substantial share of its sales from other types of athletic shoes, notably basketball shoes and tennis shoes. In addition, Nike benefited from strong sales of its other product lines, which include d apparel, work and leisure shoes, and children's shoes.
Given slowing growth in the U.S. market, however, the company turned its attention to foreign markets, inaugurating Nike International, Lt d. in 1981 to spearhead the company's push into Europe and Japan, as well as into Asia, Latin America, and Africa. In Europe, Nike faced s tiff competition from adidas and Puma, which had a stronghold on the soccer market, Europe's largest athletic shoe category. The company o pened a factory in Ireland to enable it to distribute its shoes witho ut paying high import tariffs, and in 1981 bought out its distributor s in England and Austria, to strengthen its control over marketing an d distribution of its products. In 1982 the company outfitted Aston V illa, the winning team in the English and European Cup soccer champio nships, giving a boost to promotion of its new soccer shoe.
In Japan, Nike allied itself with Nissho Iwai, the sixth largest Japa nese trading company, to form Nike-Japan Corporation. Because Nike al ready held a part of the low-priced athletic shoe market, the company set its sights on the high-priced end of the scale in Japan.
By 1982 the company's line of products included more than 200 differe nt kinds of shoes, including the Air Force I, a basketball shoe, and its companion shoe for racquet sports, the Air Ace, the latest models in the long line of innovative shoe designs that had pushed Nike's e arnings to an average annual increase of almost 100 percent. In addit ion, the company marketed more than 200 different items of clothing. By 1983, when the company posted its first ever quarterly drop in ear nings as the running boom peaked and went into a decline, Nike's lead ers were looking to the apparel division, as well as overseas markets , for further expansion. In foreign sales, the company had mixed resu lts. Its operations in Japan were almost immediately profitable, and the company quickly jumped to second place in the Japanese market, bu t in Europe, Nike fared less well, losing money on its five European subsidiaries.
Faced with an 11.5 percent drop in domestic sales of its shoes in the 1984 fiscal year, Nike moved away from its traditional marketing str ategy of support for sporting events and athlete endorsements to a wi der-reaching approach, investing more than $10 million in its fir st national television and magazine advertising campaign. This follow ed the "Cities Campaign," which used billboards and murals in nine Am erican cities to publicize Nike products in the period before the 198 4 Olympics. Despite the strong showing of athletes wearing Nike shoes in the 1984 Los Angeles Olympic games, Nike profits were down almost 30 percent for the fiscal year ending in May 1984, although internat ional sales were robust and overall sales rose slightly. This decline was a result of aggressive price discounting on Nike products and th e increased costs associated with the company's push into foreign mar kets and attempts to build up its sales of apparel.
Earnings continued to fall in the next three quarters as the company lost market share, posting profits of only $7.8 million at the en d of August 1984, a loss of $2.2 million three months later, and another loss of $2.1 million at the end of February 1985. In resp onse, Nike adopted a series of measures to change its sliding course. The company cut back on the number of shoes it had sitting in wareho uses and also attempted to fine-tune its corporate mission by cutting back on the number of products it marketed. It made plans to reduce the line of Nike shoes by 30 percent within a year and a half. In add ition, leadership at the top of the company was streamlined, as found er Knight resumed the post of president, which he had relinquished in 1983, in addition to his duties as chairman and chief executive offi cer. Overall administrative costs were also reduced. As part of this effort, Nike also consolidated its research and marketing branches, c losing its facility in Exeter, New Hampshire, and cutting 75 of the p lant's 125 employees. Overall, the company laid off about 400 workers during 1984.
Faced with shifting consumer interests (i.e., the U.S. market move fr om jogging to aerobics), the company created a new products division in 1985 to help keep pace. In addition, Nike purchased Pro-form, a sm all maker of weightlifting equipment, as part of its plan to profit f rom all aspects of the fitness movement. The company was restructured further at the end of 1985 when its last two U.S. factories were clo sed and its previous divisions of apparel and athletic shoes were rea rranged by sport. In a move that would prove to be the key to the com pany's recovery, in 1985 the company signed basketball player Michael Jordan to endorse a new version of its Air shoe, introduced four yea rs earlier. The new basketball shoes bore the name "Air Jordan."
In early 1986 Nike announced expansion into a number of new lines, in cluding casual apparel for women, a less expensive line of athletic s hoes called Street Socks, golf shoes, and tennis gear marketed under the name "Wimbledon." By mid-1986 Nike was reporting that its earning s had begun to increase again, with sales topping $1 billion for the first time. At that point, the company sold its 51 percent stake in Nike-Japan to its Japanese partner; six months later, Nike laid of f 10 percent of its U.S. employees at all levels in a major cost-cutt ing strategy.
Following these moves, Nike announced a drop in revenues and earnings in 1987, and another round of restructuring and budget cuts ensued, as the company attempted to come to grips with the continuing evoluti on of the U.S. fitness market. Only Nike's innovative Air athletic sh oes provided a bright spot in the company's otherwise erratic progres s, allowing the company to regain market share from rival Reebok Inte rnational Ltd. in several areas, including basketball and cross-train ing.
The following year, Nike branched out from athletic shoes, purchasing Cole Haan, a maker of casual and dress shoes, for $80 million. A dvertising heavily, the company took a commanding lead in sales to yo ung people to claim 23 percent of the overall athletic shoe market. P rofits rebounded to reach $100 million in 1988, as sales rose 37 percent to $1.2 billion. Later that year, Nike launched a $10 million television campaign around the theme "Just Do It" and announ ced that its 1989 advertising budget would reach $45 million.
In 1989 Nike unveiled several new lines of shoes and led its market w ith $1.7 billion in sales, yielding profits of $167 million. The company's product innovation continued, including the introductio n of a basketball shoe with an inflatable collar around the ankle, so ld under the brand name Air Pressure. In addition, Nike continued its aggressive marketing, using ads featuring Michael Jordan and actor-d irector Spike Lee, the ongoing "Just Do It" campaign, and the "Bo Kno ws" television spots featuring athlete Bo Jackson. At the end of 1989 , the company began relocation to its newly constructed headquarters campus in Beaverton, Oregon.
Market Dominance in the Early to Mid-1990s
In 1990 the company sued two competitors for copying the patented des igns of its shoes and found itself engaged in a dispute with the U.S. Customs Service over import duties on its Air Jordan basketball shoe s. In 1990 the company's revenues hit $2 billion. The company acq uired Tetra Plastics Inc., producers of plastic film for shoe soles. That year, the company opened NikeTown, a prototype store selling the full range of Nike products, in Portland, Oregon.
By 1991 Nike's Visible Air shoes had enabled it to surpass its rival Reebok in the U.S. market. In the fiscal year ending May 31, 1991, Ni ke sales surpassed the $3 billion mark, fueled by record sales of 41 million pairs of Nike Air shoes and a booming international marke t. Its efforts to conquer Europe had begun to bear fruit; business th ere grew by 100 percent that year, producing more than $1 billion in sales and gaining the second place market share behind Adidas. Ni ke's U.S. shoe market had, in large part, matured, slowing to 5 perce nt annual growth, down from 15 percent annual growth from 1980 and 19 88. The company began eyeing overseas markets and predicted ample roo m to grow in Europe. Nike's U.S. rival Reebok, however, also saw pote ntial for growth in Europe, and by 1992 European MTV was glutted with athletic shoe advertisements as the battle for the youth market heat ed up between Nike, Reebok, and their European competitors, Adidas an d Puma.
Nike also saw growth potential in its women's shoe and sports apparel division. In February 1992 Nike began a $13 million print and te levision advertising pitch for its women's segment, built upon its "D ialogue" print campaign, which had been slowly wooing 18- to 34-year- old women since 1990. Sales of Nike women's apparel lines Fitness Ess entials, Elite Aerobics, Physical Elements, and All Condition Gear in creased by 25 percent in both 1990 and 1991 and jumped by 68 percent in 1992.
In July 1992 Nike opened its second NikeTown retail store in Chicago. Like its predecessor in Portland, the Chicago NikeTown was designed to "combine the fun and excitement of FAO Schwartz, the Smithsonian I nstitute and Disneyland in a space that will entertain sports and fit ness fans from around the world" as well as provide a high-profile re tail outlet for Nike's rapidly expanding lines of footwear and clothi ng.
Nike celebrated its 20th anniversary in 1992, virtually debt free and with company revenues of $3.4 billion. Gross profits jumped $ ;100 million in that year, fueled by soaring sales in its retail divi sion, which expanded to include 30 Nike-owned discount outlets and th e two NikeTowns. To celebrate its anniversary, Nike brought out its o ld slogan "There is no finish line." As if to underscore that sentime nt, Nike Chairman Philip Knight announced massive plans to remake the company with the goal of being "the best sports and fitness company in the world." To fulfill that goal, the company set the ground plans for a complicated yet innovative marketing structure seeking to make the Nike brand into a worldwide megabrand along the lines of Coca-Co la, Pepsi, Sony, and Disney.
Nike continued expansion of its high-profile NikeTown chain, opening outlets in Atlanta, Georgia, in the spring of 1993 and Costa Mesa, Ca lifornia, later that year. Also in 1993, as part of its long-term mar keting strategy, Nike began an ambitious venture with Mike Ovitz's Cr eative Artists Agency to organize and package sports events under the Nike name, a move that potentially led the company into competition with sports management giants such as ProServ, IMG, and Advantage Int ernational.
Nike also began a more controversial venture into the arena of sports agents, negotiating contracts for basketball's Scottie Pippin, Alonz o Mourning, and others in addition to retaining athletes such as Mich ael Jordan and Charles Barkley as company spokespersons. Nike's influ ence in the world of sports grew to such a degree that in 1993 Spo rting News dubbed Knight the most powerful man in sports.
Critics contended that Nike's influence ran too deep, having its hand in negotiating everything in an athlete's life from investments to t he choice of an apartment. But Nike's marketing executives saw it as part of a campaign to create an image of Nike not just as a product l ine but as a lifestyle, a "Nike attitude."
Nearly everyone agreed, however, that Nike was the dominant force in athletic footwear in the early to mid-1990s. The company held about 3 0 percent of the U.S. market by 1995, far outdistancing the 20 percen t of its nearest rival, Reebok. Overseas revenues continued their ste ady rise, reaching nearly $2 billion by 1995, about 40 percent of the overall total. Not content with its leading position in athletic shoes and its growing sales of athletic apparel, which accounted for more than 30 percent of revenues in 1996, Nike branched out into spo rts equipment in the mid-1990s. In 1994 the company acquired Canstar Sports Inc., the leading maker of skates and hockey equipment in the world, for $400 million. Canstar was renamed Bauer Nike Hockey In c., Bauer being Canstar's brand name for its equipment. Two years lat er Bauer Nike became part of the newly formed Nike equipment division , which aimed to extend the company into the marketing of sport balls , protective gear, eyewear, and watches. Also during this period, Nik e signed its next superstar spokesperson, Tiger Woods. In 1995, at th e age of 20, Woods agreed to a 20-year, $40 million endorsement c ontract. The golf phenom went on to win an inordinate number of tourn aments, often shattering course records, and was on pace to eclipse g olf legend Jack Nicklaus's illustrious lifetime record of winning 18 majors, more than validating the blockbuster contract.
Late 1990s Slippage
For the fiscal year ending in May 1997, Nike earned a record $795 .8 million on record revenues of $9.19 billion. Overseas sales pl ayed a large role in the 42 percent increase in revenues from 1996 to 1997. Sales in Asia increased by more than $500 million (to $ ;1.24 billion), while European sales surged ahead by $450 million . Back home, Nike's share of the U.S. athletic shoe market neared 50 percent. The picture at Nike soon turned sour, however, as the Asian financial crisis that erupted in the summer of 1997 sent sneaker sale s in that region plunging. By 1999, sales in Asia had dropped to $ ;844.5 million. Compounding the company's troubles was a concurrent s tagnation of sales in its domestic market, where the fickle tastes of teenagers began turning away from athletic shoes to hiking boots and other casual "brown shoes." As a result, overall sales for 1999 fell to $8.78 billion. Profits were falling as well, including a net loss of $67.7 million for the fourth quarter of 1998, the company 's first reported loss in more than 13 years. The decline in net inco me led to a cost-cutting drive that included the layoff of 5 percent of the workforce, or 1,200 people, in 1998, and the slashing of its b udget for sports star endorsements by $100 million that same year .
Nike was also dogged throughout the late 1990s by protests and boycot ts over allegations regarding the treatment of workers at the contrac t factories in Asia that employed nearly 400,000 people and that made the bulk of Nike shoes and much of its apparel. Charges included abu se of workers, poor working conditions, low wages, and use of child l abor. Nike's initial reaction, which was highlighted by Knight's insi stence that the company had little control over its suppliers, result ed in waves of negative publicity. Protesters included church groups, students at universities that had apparel and footwear contracts wit h Nike, and socially conscious investment funds. Nike finally announc ed in mid-1998 a series of changes affecting its contract workforce i n Asia, including an increase in the minimum age, a tightening of air quality standards, and a pledge to allow independent inspections of factories. Nike nonetheless remained under pressure from activists in to the 21st century. Nike, along with McDonald's Corporation, the Coc a-Cola Company, and Starbucks Corporation, among others, also became an object of protest from those who were attacking multinational comp anies that pushed global brands. This undercurrent of hostility burst into the spotlight in late 1999 when some of the more aggressive pro testers against a World Trade Organization meeting in Seattle attempt ed to storm a NikeTown outlet.
Seeking to recapture the growth of the early to mid-1990s, Nike pursu ed a number of new initiatives in the late 1990s. Having initially mi ssed out on the trend toward extreme sports (such as skateboarding, m ountain biking, and snowboarding), Nike attempted to rectify this mis cue by establishing a unit called ACG, short for "all-conditions gear ," in 1998. Two years later, the company created a new division calle d Techlab to market a line of sports-technology accessories, such as a digital audio player, a high-altitude wrist compass, and a portable heart-rate monitor. Both of these initiatives were aimed at capturin g sales from the emerging Generation Y demographic group. In early 19 99 Nike began selling its shoes and other products directly to consum ers via the company web site. The company finally earned some good pu blicity in 1999 when it sponsored the U.S. national women's soccer te am that won the Women's World Cup. In December 1999 Nike cofounder Bo werman died, and the company later introduced a line of running shoes in his honor.
Early 21st-Century Comeback
Nike's struggles continued into the early 2000s, but by 2002 the comp any appeared to have turned a corner. Surprisingly, the turnaround st emmed in large part not from clever marketing or new high-tech sneake rs but from concentrating more attention on the more mundane aspects of running a business, such as investing in start-of-the-art informat ion systems, logistics, and supply-chain management. Equally importan t was Knight's willingness to cede more control of the company to a n umber of underlings, some recruited from the outside. Donald W. Blair was brought onboard from PepsiCo, Inc. to become chief financial off icer in 1999 after Nike inexplicably had been without a CFO for two y ears. In 2001 Knight named two longtime company insiders, Mark G. Par ker and Charles D. Denson, as copresidents with responsibility for da y-to-day operations. On the product side, Nike successfully overhaule d its apparel operations, garnered surging sales of its golf equipmen t after Woods began using Nike golf balls in 2000, and made a big pus h in the soccer shoe market, where it gained the top spot among Europ ean soccer shoe buyers, leapfrogging over Adidas, by 2003. Nike also continued to score endorsement coups, inking high school basketball p henom LeBron James to a $90 million contract in 2003.
The Nike comeback also centered around a commitment to lessen its dep endence on the volatile market for high-performance shoes by owning a portfolio of brands covering different market sectors and price poin ts. In 2002 the company bought Hurley International, a teen lifestyle brand, for an estimated $95 million. Based in Costa Mesa, Califo rnia, Hurley was a designer and distributor of action sports apparel and footwear for surfing, skateboarding, and snowboarding. Nike next bought Converse Inc. for $305 million in September 2003. The 95-y ear-old Converse of North Andover, Massachusetts, was best known for its retro, low-tech Chuck Taylor All-Star sneakers, a product that fo r many teenagers and young adults had come to be viewed as the very a ntithesis of everything Nike. Converse's management team remained in place following the takeover, with the company operating as an autono mous subsidiary. In August 2004 Nike bought Official Starter Properti es LLC and Official Starter LLC for approximately $47 million. Th ese companies marketed athletic apparel, footwear, and accessories un der the Starter, Team Starter, Asphalt, Shaq, and Dunkman brands (the latter two featuring NBA star Shaquille O'Neal), primarily through d iscount chains such as Wal-Mart Stores, Inc. These brands were placed within a new wholly owned subsidiary, Exeter Brands Group LLC, focus ing on developing products for value-conscious consumers.
While these acquisitions were unfolding in the United States, Nike wa s pushing hard into overseas markets, and by 2003 international sales exceeded domestic sales for the first time. Starting in 2002 the com pany also concentrated on building an extensive program to address th e perennial charges of labor exploitation. Nike began allowing a moni toring organization it had cofounded, the Fair Labor Association, to conduct random factory inspections. It also built an in-house staff o f approximately 100 employees to inspect hundreds of factories and gr ade them on labor standards. In early 2005 Nike took an unprecedented step toward greater transparency by issuing a list of its more than 700 contract factories. Such moves provided the basis for an improvin g relationship between Nike and its critics. There were even a few ca ses in which activists worked with the company to resolve specific is sues at certain factories.
Nike enjoyed record results in the fiscal year ending in May 2004, po sting profits of $945.6 million on revenues of $12.25 billion . Profits surged past the $1 billion mark the next year, hitting $1.21 billion, while revenues jumped to a new high of $13.74 billion. Late in 2004 Knight stepped aside from his executive positio n, while remaining chairman, to bring William D. Perez onboard as pre sident and CEO. Perez, a marathon runner and avid golfer, was hired a way from S.C. Johnson & Son, Inc., the family-controlled consumer products company, where he spent 34 years and rose to the top as pre sident and CEO. His vast international experience was expected to hel p Nike as it continued its expansion abroad, and Perez was known as a n excellent marketer with a stellar reputation of acquiring and manag ing well-known brands. Within months of Perez's appointment, Nike's n eed for such an experienced hand appeared to grow when adidas-Salomon AG agreed to buy Reebok International Ltd. for approximately $3. 8 billion. The deal, announced in August 2005, promised to combine tw o of Nike's biggest rivals, giving the newly enlarged company about 3 0 percent of the worldwide athletic footwear market, compared to Nike 's 37 percent. A revitalized Nike nevertheless seemed to have the str ategies in place to fend off this new threat and stay on top of the g lobal sneaker heap.
Principal Subsidiaries: Bauer Nike Hockey Inc.; Cole Haan Hold ings Incorporated; Converse Inc.; Hurley International LLC; Exeter Br ands Group LLC.
Principal Competitors: Reebok International Ltd.; adidas-Salom on AG; Fila USA, Inc.; PUMA AG Rudolf Dassler Sport; Skechers U.S.A., Inc.
- Key Dates:
- 1962: Philip H. Knight founds Blue Ribbon Sports (BRS) to impo rt Japanese running shoes.
- 1963: BRS takes its first delivery of 200 shoes from Onitsuka Tiger Co.
- 1964: BRS becomes partnership between Knight and William Bower man.
- 1966: The company's first retail outlet opens.
- 1968: Company is incorporated as BRS, Inc.; the Bowerman-desig ned Cortez shoe becomes a big seller.
- 1971: BRS begins manufacturing its own products overseas, thro ugh subcontractors; the Swoosh trademark and the Nike brand are intro duced.
- 1972: At the U.S. Olympic Trials, the Nike brand is promoted f or the first time; company enters its first foreign market, Canada.
- 1978: Company changes its name to Nike, Inc.
- 1979: First line of clothing is launched and the Nike Air shoe cushioning device debuts.
- 1980: Nike goes public.
- 1981: Nike International, Ltd. is created to spearhead oversea s push.
- 1985: Company signs Michael Jordan to endorse a version of its Air shoe, the "Air Jordan."
- 1988: Cole Haan, maker of casual and dress shoes, is acquired; "Just Do It" slogan debuts.
- 1990: First NikeTown retail outlet opens in Portland, Oregon.
- 1994: Company acquires Canstar Sports Inc., the leading maker of skates and hockey equipment in the world, later renamed Bauer Nike Hockey Inc.
- 1995: Company signs golfer Tiger Woods to a $40 million en dorsement deal.
- 1996: The Nike equipment division is created.
- 1999: Company begins selling its products directly to consumer s via its web site.
- 2003: Converse Inc. is acquired for $305 million.
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