Nike 2011 Annual Report Download - page 3

3NIKE,INC.-Form10-K
PARTI
ITEM1Business
PARTI
ITEM1 Business
General
NIKE,Inc. was incorporated in 1968 under the laws of the state of Oregon.
As used in this report, the terms “we”, “us”, “NIKE” and the “Company” refer
to NIKE,Inc. and its predecessors, subsidiaries and affi liates, unless the
context indicates otherwise. Our Internet address is www.nike.com. On our
NIKE Corporate web site, located at www.nikebiz.com, we post the following
fi lings as soon as reasonably practicable after they are electronically fi led with
or furnished to the Securities and Exchange Commission: our annual report
on Form10-K, our quarterly reports on Form10-Q, our current reports on
Form8-K and any amendments to those reports fi led or furnished pursuant
to Section13(a) or 15(d) of the Securities and Exchange Act of 1934, as
amended. All such fi lings on our NIKE Corporate web site are available free
of charge. Also available on the NIKE Corporate web site are the charters of
the committees of our board of directors, as well as our corporate governance
guidelines and code of ethics; copies of any of these documents will be
provided in print to any shareholder who submits a request in writing to NIKE
Investor Relations, One Bowerman Drive, Beaverton, Oregon 97005-6453.
Our principal business activity is the design, development and worldwide
marketing and selling of high quality footwear, apparel, equipment, and
accessory products. NIKE is the largest seller of athletic footwear and athletic
apparel in the world. We sell our products to retail accounts, through NIKE-
owned retail stores and internet sales, which we refer to as our “Direct to
Consumer” operations, and through a mix of independent distributors and
licensees, in over 170 countries around the world. Virtually all of our products
are manufactured by independent contractors. Virtually all footwear and apparel
products are produced outside the UnitedStates, while equipment products
are produced both in the UnitedStates and abroad.
Products
NIKE’s athletic footwear products are designed primarily for specifi c athletic
use, although a large percentage of the products are worn for casual or leisure
purposes. We place considerable emphasis on high quality construction and
innovation in products designed for men, women and children. Running,
training, basketball, soccer, sport-inspired casual shoes, and kids’ shoes
are currently our top-selling footwear categories and we expect them to
continue to lead in product sales in the near future. We also market footwear
designed for baseball, cheerleading, football, golf, lacrosse, outdoor activities,
skateboarding, tennis, volleyball, walking, wrestling, and other athletic and
recreational uses.
We sell sports apparel and accessories covering most of the above categories,
sports-inspired lifestyle apparel, as well as athletic bags and accessory
items. NIKE apparel and accessories feature the same trademarks and
are sold through the same marketing and distribution channels. We often
market footwear, apparel and accessories in “collections” of similar design
or for specifi c purposes. We also market apparel with licensed college and
professional team and league logos.
We sell a line of performance equipment under the NIKE Brand name,
including bags, socks, sport balls, eyewear, timepieces, electronic devices,
bats, gloves, protective equipment, golf clubs, and other equipment designed
for sports activities. We also sell small amounts of various plastic products
to other manufacturers through our wholly-owned subsidiary, NIKE IHM,Inc.
In addition to the products we sell directly to customers through our Direct to
Consumer operations, we have entered into license agreements that permit
unaffi liated parties to manufacture and sell certain apparel, electronic devices
and other equipment designed for sports activities.
Our wholly-owned subsidiary, Cole Haan (“Cole Haan”), headquartered in New
York, New York, designs and distributes dress and casual footwear, apparel
and accessories for men and women under the Cole Haan® trademark.
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 International Limited (“Umbro”),
headquartered in Cheadle, United Kingdom, 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18 of the accompanying Notes to the Consolidated Financial Statements
on page55.
We experience moderate fl uctuations in aggregate sales volume during
theyear. Historically, revenues in the fi rst and fourth fi scal 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.