Nike aborts plans for Goodyear factory amid COVID-19 outbreak
Category: #headlines  | By Nikita Chaurasia  | Date: 2020-07-30 |
  • shareshare_icon
  • Twitter
  • Facebook
  • LinkedIn

Nike aborts plans for Goodyear factory amid COVID-19 outbreak

America-based multinational sports apparel company Nike Inc. has reportedly abandoned its plans to develop soles for its Nike Air shoes in Goodyear plant in Arizona. Sources close to the matter stated that the company had initially planned to start the plant in early 2020, investing over USD 184 million in its third U.S. sneakers manufacturing plant.

As per credible reports, the company generated revenues around USD 6.31 billion by the end of May 2020, which was a drop of 38%.

Reportedly, Nike lost over USD 790 million in the fourth quarter since the e-commerce sales couldn’t make up for the revenue loss from shutdown of stores during the pandemic.

According to reliable sources, Nike struggled with costs associated with built-up inventory such as factory order cancellations and wholesale markdowns. The product shipments to wholesale consumers had also dropped by 50% during the three-month period.

Spokesperson from Nike, Greg Rossiter, was reported saying that the company is experiencing hardships owing to the COVID-19 pandemic and will stop investing in the Goodyear facility.

The sports apparel giant announced that it will cut jobs on which the company spends about USD 200 million to USD 250 million, in an effort to sell more merchandise directly to the customers.

Matthew Friend, CFO at Nike, mentioned in a comment that the company predicts that its inventory grew by 30% in the fourth quarter of 2019 to be of right-sized by the end of second quarter in 2020.

Nike’s Arizona-based facility, which was acquired for USD 70 million last year, was also subjected to various controversies in 2019 when the state government threatened to pull USD 1 million incentives following Nike’s decision to not sell the Fourth of July-themed shoe in the U.S.

Source Credits –

https://www.foxbusiness.com/sports/nike-scraps-phoenix-manufacturing-plant-plan

  • shareshare_icon
  • Twitter
  • Facebook
  • LinkedIn


About Author

Nikita Chaurasia     twitter

Nikita Chaurasia

Having always been daft at wordplay, Nikita Chaurasia, post the completion of post-graduation, commenced her journey into the content generation cosmos. Endowed with a professional MBA degree in Advertising and Public Relations, Nikita strives to integrate her creativ...

Read More..

More News By Nikita Chaurasia

Goldman Sachs provides unlimited holidays to its senior employees

Goldman Sachs provides unlimited holidays to its senior employees

By Nikita Chaurasia

Goldman Sachs has recently announced a flexible vacation scheme under which the company’s senior employees can take unlimited paid leaves annually. As per sources, the global investment bank has unveiled a new policy that will allow senior sta...

Shell trades off Russian retail business to native oil producer Lukoil

Shell trades off Russian retail business to native oil producer Lukoil

By Nikita Chaurasia

Energy giant Shell plans on selling more than 400 petrol stations of its Russian subsidiary Shell Neft to Lukoil, the second largest oil producer in the country after state backed Rosneft. As several Western oil and gas firms seek to get rid of th...

Mitsubishi, Siemens sign an MoU to cooperate in SiC traction technology

Mitsubishi, Siemens sign an MoU to cooperate in SiC traction technology

By Nikita Chaurasia

Mitsubishi Electric Europe and Siemens Mobility have recently signed a memorandum of understanding (MoU) to work together in silicon carbide (SiC) traction power technology. As per reports, JR Central’s next-generation N700S Shinkansen train...