Hit by pandemic, Nike sells discounts to clear inventory in China

Hit by pandemic, Nike sells discounts to clear inventory in China

Sports Brand NikeEpidemicAs a result, in recent months, to clear inventory, products have been discounted and manufacturers’ orders have been cancelled. Nike’s latest financial report shows revenue from China fell 16% in the fiscal quarter ended August, as anti-pandemic lockdowns hit store traffic in several cities.

According to”wall StreetThe daily reported that the company, which has been operating in China for 40 years, is discounting merchandise and canceling orders from manufacturers to clear inventory in recent months. In the fiscal quarter that ended in August, the Chinese market accounted for about 13 percent of Nike’s total sales and 29 percent of its EBIT.

Nike Chief Financial Officer Matthew FriendinvestParticipants said Nike has recently taken a cautious approach in Greater China because of the risk of disruption caused by the new Crown pandemic. Despite the decline in sales in China, some executives of the company called better-than-expected results in the Chinese market and still believe that sales will pick up in the coming quarters.

Repeated lockdowns in several Chinese cities have some companies estimating how long the disruption will last and impact sales.

The lockdown and recent heat have disrupted production plans at companies, resulting in slow deliveries and affecting items such as sneakers, cosmetics and apparel.

In addition, rising inflation, foreign capital outflows and a sluggish real estate market have hurt China’s economic growth and devalued the yuan.

China

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