Nike moves sales online and prepares for cuts

Nike plans to change its sales strategy, writes Bloomberg: due to the fall in demand in stores caused by the coronavirus, the company is going to move half of its sales online. Because of this, it will face a wave of layoffs, Nike head John Donahue warned employees.

The company plans to create a clear electronic trading platform and increase the share of online sales from 30% to 50%, quotes Business Insider Donahue. Due to the change in strategy, Nike is waiting for possible cuts, the CEO warned. How many people have been laid off is still unknown. “We are building a more flexible company. Nike must change quickly to define the market of the future,” Donahue said.

Nike's online sales are up 75% in the last quarter. For comparison: deliveries to wholesale buyers collapsed by 50% over the same time. Nike's gross margin ended up falling 8.2% to 37.3%, its worst performance since 1998, Bloomberg calculated. But with a cash cushion of $12.5 billion, the company is able to weather the crisis.