A Simple Enough Solution

And straightforward, too.

Nike thinks it has supply chain and marketing problems with its shoe manufacturing.

Nike Inc’s quarterly results highlight how some US brands have too much inventory at home and in markets like China, where the companies have placed big financial bets.
The sneaker giant on Thursday said revenue from China in the August quarter fell 16% to $1.65 billion, citing Covid-19 lockdowns in different cities hurting store traffic.

The People’s Republic of China represented some 13% of sales and 29% of earnings for Nike in its quarter ending last August.

Nike offered a number of excuses for its problems, including the PRC’s Wuhan Virus-related lockdowns, a heat wave in the PRC that the PRC claimed affected energy production, and inflation.

These are, though, just excuses. Nike’s problem—and it’s a political and a moral one, also—is that it does business inside the PRC.

These problems wouldn’t exist if the company moved is manufacturing facilities out of the PRC. Neither Vietnam nor Japan nor Australia have lockdown or heat wave/energy problems affecting manufactury (Australia has made significant progress since its wind storm shut down its wind-power energy production in a western state a couple years ago).

Neither would Nike have a PRC-related inflation related problem with its PRC inventory or sales if it didn’t do business in the PRC.

Nike wouldn’t have any sort of supply chain problem, or delivery problem, were it to make its products in the US.

Nike would solve its political and moral problems (did company managers have the grace to recognize that these problems are real) if it had no business dealings of any sort with the PRC so long as that nation continues its genocidal behavior vis-à-vis the Uighurs.

Leave a Reply

Your email address will not be published. Required fields are marked *