Nike has announced ambitious revenue targets of $50bn by 2020 as it banks on increased sales from women and the growing popularity of running.
The world’s largest sports company laid out its 5 year targets during an investor meeting at its world headquarters in Oregon.
The company’s chief executive, Mark Parker, asserted that Nike would reach the $50bn mark by doubling its women’s business to £11bn in revenue and increasing online sales sevenfold to $7bn.
In an interview with Bloomberg Parker said the growth in its women’s business was not just a fitness trend but a “lifestyle shift” which signified that “active apparel will be here for years to come”.
An increase on this scale represents a 10.3 per cent increase on its $30bn in revenue in the last fiscal year. This target looks achievable given that sales increased by 10.1 per cent that year and 9.8 per cent the previous year.
During the company investor meeting, Parker said the brand was “resonating around the world” and that its momentum made the targets “very achievable”.
China is expected to see the highest rate of growth in the coming years with the company stating it expects a mid-teens growth rate over the next five years, reaching $6.5bn in revenue by the end of fiscal year 2020.
The company also expects gains from its top key categories. The first is running, which is projected to rise by $7.5bn in the next five years. Nike's confidence in the sector stems from the popularity of the Nike Free shoe line and its running app partnership with Apple. The second is its Jordan brand which is tipped to double in size to $4.5 billion.
Other strategies being developed to help increase its profitability are upping prices, reducing manufacturing waste and cutting labour costs. The manufacturing area of its business will likely enjoy greater efficiency follow the creation of its 125,000-square-foot innovation lab which will push forward 3D printing of shoes.
Nike’s focus on improving its manufacturing processes led to a new partnership with innovative technology company Flex. The deal is designed to drive innovation within the manufacturing process while also developing a product customization program. Nike’s chief operating officer, Eric Sprunk, said the deal meant “a future of personalized, rapidly-delivered product that is made more efficiently and with less waste is well underway.”