NIKE (NKE) Rolls Out Rise Concept Store to Tap China Market

NIKE Inc’s NKE digital transformation efforts have always been lauded by customers and investors for bringing the newest concepts to enhance customer experience. This time again, the company is ready to entice customers with the launch of its latest concept store – Nike Rise – in Guangzhou, China. The new concept store, launched on Jul 9, links the digital and in-store formats. Further, the company plans to introduce more Nike Rise stores in its global fleet in 2021.

The store concept is powered on customer data received via Nike apps, which is used to provide a personalized experience by connecting them to various sporting and fitness events in the customer’s city. This is the company’s fourth retail concept store, following the Nike House of Innovation, Nike Live and Nike Factory outlet stores.

Some of the innovative offerings at Nike Rise will include the Nike Experiences App that will connect customers and provide information about sporting and fitness events in the customer’s city. It will also provide customers access to in-store workshops and events held by Nike athletes, experts and sports influencers. Further, it will feature a Nike By You bar for delivering personalized items to customers, with elements of designs from local teams as well as everyday products like totes and t-shirts.

Additionally, the store will feature the Nike Fit technology for the first time for China customers. This technology was earlier launched for customers in the United States, which allows workers to scan through customers’ feet measurements to design the best shoes for a perfect fit. The sports pulse, which will hold prominence in the Rise store, will be running, basketball and football.

The new concept store should be a value addition for Nike as it may rekindle the company’s revenue stream, which has been hit by the recent global store closures thanks to the coronavirus outbreak.

Notably, revenues of the Swoosh brand owner declined 38% year over year and missed the Zacks Consensus Estimate in fourth-quarter fiscal 2020. On a currency-neutral basis, revenues slumped 36%. The decline resulted from the closing of the majority of NIKE-owned and partner stores in North America, EMEA and APLA due to the coronavirus pandemic, partially offset by growth in Greater China.

The company closed nearly 90% of its company-owned stores for eight weeks in the fiscal fourth quarter to safeguard employees and consumers, and prevent the spread of the virus. Furthermore, its wholesale partners remained closed during the period, resulting in a 50% decline in product shipments to wholesale customers. This also led to a decline in total revenues and increased inventory levels.

However, the top line benefited from robust double-digit digital sales across all regions. Digital sales increased 75% in the fiscal fourth quarter and 79% on a currency-neutral basis. Moreover, digital sales accounted for nearly 30% of total revenues in the reported quarter.

Shares of this Zacks Rank #3 (Hold) company have lost 4.2% year to date compared with the industry’s 5.7% decline.

 

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Click to get this free report NIKE, Inc. (NKE) : Free Stock Analysis Report Hanesbrands Inc. (HBI) : Free Stock Analysis Report Crocs, Inc. (CROX) : Free Stock Analysis Report Duluth Holdings Inc. (DLTH) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research