Nike 2010 Annual Report Download - page 5

Table of Contents
Our wholly−owned subsidiary, Converse Inc. (“Converse”), headquartered in North Andover, Massachusetts, designs, distributes and licenses athletic
and casual footwear, apparel and accessories under the Converse®, Chuck Taylor®, All Star®, One Star®, Star Chevron and Jack Purcell® trademarks.
Our wholly−owned subsidiary, Hurley International LLC (“Hurley”), headquartered in Costa Mesa, California, designs and distributes a line of action
sports and youth lifestyle apparel and accessories under the Hurley® trademark.
Our wholly−owned subsidiary, Umbro Ltd. (“Umbro”), headquartered in Cheadle, England, designs, distributes and licenses athletic and casual
footwear, apparel and equipment, primarily for the sport of football (soccer), under the Umbro® trademark.
Sales and Marketing
Financial information about geographic and segment operations appears in Note 19 of the accompanying Notes to the Consolidated Financial
Statements on page 88.
We experience moderate fluctuations in aggregate sales volume during the year. Historically, revenues in the first and fourth fiscal quarters have
slightly exceeded those in the second and third quarters. However, the mix of product sales may vary considerably as a result of changes in seasonal and
geographic demand for particular types of footwear, apparel and equipment.
Because NIKE is a consumer products company, the relative popularity of various sports and fitness activities and changing design trends affect the
demand for our products. We must therefore respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings,
developing new products, styles and categories, and influencing sports and fitness preferences through aggressive marketing. Failure to respond in a timely
and adequate manner could have a material adverse effect on our sales and profitability. This is a continuing risk.
We report our NIKE Brand operations based on our internal geographic organization. Each NIKE Brand geography operates predominantly in one
industry: the design, production, marketing and selling of sports and fitness footwear, apparel, and equipment. In the third quarter of fiscal 2009, we
initiated a reorganization of the NIKE Brand into a new model consisting of six geographies. Effective June 1, 2009, we began operating under our new
organizational structure for the NIKE Brand, which consists of the following geographies: North America, Western Europe, Central and Eastern Europe,
Greater China, Japan, and Emerging Markets. Previously, NIKE Brand operations were organized into the following four geographic regions: U.S.; Europe;
Middle East and Africa (collectively, “EMEA”); Asia Pacific; and Americas.
United States Market
In fiscal 2010 and 2009, sales in the United States including U.S. sales of our Other Businesses accounted for approximately 42% of total revenues,
compared to 43% in fiscal 2008. For fiscal 2010 and 2009, our Other Businesses were primarily comprised of Cole Haan, Converse, Hurley, NIKE Golf and
Umbro (which was acquired on March 3, 2008). For fiscal 2008, our Other Businesses were primarily comprised of Cole Haan, Converse, Exeter (whose
primary business was the Starter brand business which was sold on December 17, 2007), Hurley, NIKE Bauer Hockey (which was sold on April 17, 2008),
NIKE Golf and Umbro. We estimate that we sell to more than 23,000 retail accounts in the United States. The NIKE Brand domestic retail account base
includes a mix of footwear stores, sporting goods stores, athletic specialty stores, department stores, skate, tennis and golf shops, and other retail accounts.
During fiscal 2010, our three largest customers accounted for approximately 24% of sales in the United States.
We make substantial use of our “futures” ordering program, which allows retailers to order five to six months in advance of delivery with the
commitment that their orders will be delivered within a set time
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