Nike
In 1958 the beginning of NIKE Inc. came about
when Coach Bill Bowermen and
business student Phil Knight, both from the
University of Oregon, felt the need for a better athletic shoe.
Through
Bowermen’s athletic experience and Knight’s business background
they
designed and tried to sell their model of the perfect running shoe. None
of the
major companies trusted the engineering or demand for the new sneaker
and
therefore would not manufacture the item. In 1964 Bowerman and Knight
used their
own money to start Blue Ribbon Sports company. They convinced
Onitsoda Tiger to
manufacture their sneakers, which they sold from their cars
at track meets. Four
years later Blue Ribbon Sports was changed to, the now
famous, NIKE, which was
named for the Greek Goddess of victory. In that same
year, the NIKE
"swoosh" logo was designed by Carolyn Davidson, for which she
was then
paid only $35. The time came when the owners decided that NIKE could
survive on
its own. NIKE separated itself from Onitsoka Tiger in 1972. It was
in this year
that NIKE convinced Olympic marathon runners to wear NIKE
sneakers for their
Olympic event. Later, NIKE was able to brag that their
sneakers won four of the
top seven places in this event. The following year,
NIKE designed the waffle
sole sneaker which was worn by elite runners around
the world. The 1980’s led
to a new era of NIKE sneakers. The popularity of
running was declining rapidly
and, therefore, NIKE expanded into a new
domain. With endorsements by Michael
Jordan and other professional
athletes, new lines of sneakers, such as Air
Jordan’s and the Cross
Trainer, became available in the market. One of the
most influential
advertising schemes for NIKE Inc. was the "Just Do
It" campaign which
took effect in 1988. In the turn of the next decade,
NIKE began to expand
to more than just sneakers. In 1992, the first two NIKE
concept shops were
created, including Niketown. In the mid ‘90’s, NIKE
gained permission to
print their logos on NFL uniforms, in addition to soccer
and golf becoming
another money market. NIKE is now international with seven
Niketowns in
the US, plus one in the UK, Germany, and Japan. Products/Services
NIKE
Inc. produces a wide variety of sporting footwear and apparel. The
company
places a large emphasis on the quality and innovative design of their
products.
As of 1993, the top-selling products were shoes manufactured
for Basketball,
Fitness, running, and children. However, the company also
markets products for
tennis, golf, soccer, baseball, football, cycling,
volleyball, wrestling,
cheerleading, aquatic activities and outdoor athletic
and recreational use. In
addition Company often markets footwear, apparel and
accessories in
"collections" of similar design or for specific purpose.
Athletic
shoes are not NIKE’s sale investment. NIKE Inc. also sells several
products
under different names. They sell a line of casual footwear and
apparel under the
names of "i.e." and Cole Haan. In 1993, the company
acquired Sports
Specialties, Inc. which markets head wear. Nike also
sells plastic products to
other manufactures through its wholly-owned
subsidiary, Tetra Plastics, Inc.
Message to Stock Holders NIKE believes
that each sport requires different
athletic equipment, especially shoes.
Although NIKE expects to come out on top
of the market, the Company expects a
few hard tasks necessary to overcome in the
upcoming year. The economic
atmosphere in Western Europe is the worst in
NIKE’s 13 years. They are
establishing their first real "futures"
program like the one currently in the
US. It is designed to improve the long
term profitability of the company and
of cooperating retailers. The Company is
very excited about reaching their $1
billion point abroad. Domestically, total
revenues grew over $4 billion over
the past six years. The Company has two main
goals for next year. First, they
want to get the whole international division
positioned so it can resume
faster growth once the underlying economies improve.
Second, they need to
keep growth, albeit single-digit growth, increasing for the
NIKE brand in
the US. They believe that there is a lot of upside potential in
both the US
and abroad and the management understands that it is their
responsibility to
reach this potential. They are committed to making
improvements in both their
products and policies, and maximizing growth.
Financial Condition For the
sixth consecutive year, NIKE Inc. set new records in
revenues and net income
in fiscal 1993. "Consolidated revenues rose $526
million to $3.9 billion, an
increase of 15% over the industry record $3.4
billion also set by NIKE in
1992 and an increase of 31% over the 1991
record." During the six year
period, revenues have increased 348%.
International revenues now
represent 36% of consolidated revenues, growing 24%
over 1992 and 63% over
1991. The revenues have increased 495% during this six
year period.
Consolidated net income increased 11% over 1992 and 27% over 1991
in this
period. The Company surpassed the $2 billion level in total assets for
the
first time during the fiscal year 1993. The $1 billion mark was achieved
in
1990 and during the six year period referred to above, total assets
have
increased 917%. Stock as an Investment In my opinion, NIKE would be a
good
investment. NIKE Inc., is internationally known and is a stable company
always
on the up rise. As with all companies, objectives cannot be obtained
smoothly.
There will be some ups and downs, but the upside growth
potential in the common
stock is very probable.