Nike 2005 Annual Report Download - page 5

athletes earned Olympic gold in every men’s running event except the
marathon. It would have been a sweep but for the full moon, which prompted
a crazed spectator to jump from the crowd and mug race leader Vanderlei Lima .
As this book goes to print, Lance Armstrong is competing in his fi nal Tour
de France. If he wins, it will be an unprecedented seven consecutive victories.
But win or lose, the Lance Armstrong story transcends the great race.
He represents the strength it takes to overcome . . . anything.
A year ago, we cooked up a little yellow bracelet that said LiveSTRONG. Our
goal was to sell 5 million bands to benefi t the Lance Armstrong Foundation.
We’re at 50 million and counting.
Lance gives us a peek at the true nature of evolution. It isn’t about change
for the sake of change. Evolution is a search for significance. New and
different isn’t enough. New and better is the way.
We’re clearly getting better at presenting our products to consumers.
NikeTown stores posted a stellar performance this year. We now have eight
NikeWomen stores in key cities throughout the U.S. and one just opened in
Munich, Germany. We’re on fi rm footing with our key retail partners. And
we’re opening 1.5 retail doors per day in China, where we nearly doubled
revenues over last year. Any country where a 110-meter hurdler can become
a national hero is a country where Nike can succeed.
Looks like we’re evolving into a truly global company.
Revenues in every Nike region outside the U.S. are up double digits over last
year. Even in the U.S., where momentum fl agged a few years ago, we’re seeing
revenues up 7%. And one year after launching a direct presence in Russia, we
see strong brand acceptance and growth. But we still have a lot of work to do.
Evolution isn’t easy.
Last year I wrote, “You want to see an opportunity for Nike akin to becoming
global? Look to the subs.” Since I mention that now, you can assume I was
right. This year revenue for the subsidiaries is up a collective 22%.
Cole Haan was named Footwear Company of the Year in Footwear News.
We acquired Starter and launched footwear for that brand. Ten years ago Nike
Golf was struggling to be taken seriously. Today our gear is used by some of
the greatest golfers in the world. Like soccer, I think we get it now. Converse
and the inimitable Chuck Taylors are fl ourishing. Hurley continues to gain
traction in the fast growing surf-culture market. Bauer NIKE Hockey continues
to innovate, and we look forward to seeing those ideas on the ice in a full NHL
season next year. It’s a portfolio of great performance and opportunity.
This year we published our fi rst Corporate Responsibility Report in three years.
A truly evolutionary report. In it we list our contract supplier base, a fi rst for
our industry. Some people say it will erode a competitive advantage, leaving
our supply chain open to those who want to steal away suppliers. Is it a risk?
Maybe, but this kind of transparency can be key to unlocking collaboration.
The industry is changing, and we believe the best way to deal with change
is to create it.
In the case of Nike, evolution isn’t the result of natural selection. It comes
from talking with consumers and serving athletes. It comes from the bright,
passionate people who make and manage Nike products—Nike Free footwear,
Nike Pro fi rst layer apparel, the Air Jordan XX shoe, the Hi-Vis Total 90 football,
and customizable NIKEiD products.
It comes from those magic moments that reaffi rm the sanctity of sports. You
never know when they’re going to happen, but you just know they’re coming.
Tiger Woods chips from the back of the 16th green at Augusta, the ball rolls
impossibly slow to the hole, hangs on the edge, the Swoosh teasing the fi eld
before it drops into the cup. The Boston Red Sox shake off a dozen strangleholds
to bust a curse 86 years in the haunting. Paula Radcliffe, devastated after pulling
out at mile 23 of the Olympic marathon, toughs out a three-second win at the
New York City Marathon. These are the incremental moments in the evolution
of human potential, and I feel privileged to be their witness.
This is my 25th letter to you as Chairman of Nike. It is the fi rst letter that
I will sign without CEO in the title. That challenge now falls to Bill Perez. He’s
used to managing multiple brands in a global environment. He holds strong
beliefs about corporate citizenship. He steps in at a time when Nike is at an
all-time high in revenues and earnings. His timing is excellent.
Philip H. Knight
Chairman of the Board,
Nike, Inc.