Nike 2013 Annual Report Download - page 4

PART I
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 affiliates, collectively, unless
the context indicates otherwise. Our internet address is www.nike.com. On
our NIKE Corporate website, located at www.nikeinc.com, we post the
following filings as soon as reasonably practicable after they are electronically
filed 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 filed or furnished
pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of
1934, as amended. All such filings on our NIKE Corporate website are
available free of charge. Also available on the NIKE Corporate website 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 athletic footwear, apparel, equipment, accessories
and services. 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 websites (which we refer to as our “Direct to
Consumer” operations) and through a mix of independent distributors and
licensees, in virtually all 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
We focus our NIKE Brand and Brand Jordan product offerings in seven key
categories: Running, Basketball, Football (Soccer), Men’s Training, Women’s
Training, NIKE Sportswear (our sports-inspired lifestyle products), and Action
Sports. We also market products designed for kids, as well as for other
athletic and recreational uses such as baseball, cricket, golf, lacrosse,
outdoor activities, football, tennis, volleyball, walking, and wrestling.
NIKE’s athletic footwear products are designed primarily for specific 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 our products. NIKE Sportswear, Running, Basketball, Football
(Soccer), 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 sell sports apparel and accessories covering most of the above-
mentioned categories, which feature the same trademarks and are sold
predominantly through the same marketing and distribution channels as
athletic footwear. We often market footwear, apparel and accessories in
“collections” of similar use or by category. 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, digital 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.
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®,AllStar
®,OneStar ®,StarChevron ®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.
In addition to the products we sell to our wholesale customers and directly to
consumers through our Direct to Consumer operations, we have also entered
into license agreements that permit unaffiliated parties to manufacture and sell
certain apparel, digital devices and applications and other equipment
designed for sports activities.
As part of our long-term growth strategy, we continually evaluate our portfolio
of businesses to ensure we are investing in those businesses that are
accretive to the NIKE Brand with the largest growth potential and highest
returns. On February 1, 2013, and November 30, 2012, we completed the
divestitures of the Cole Haan and Umbro businesses, respectively, allowing
us to better focus our resources on driving growth in the NIKE, Jordan,
Converse and Hurley brands.
NIKE, INC. 2013 Annual Report and Notice of Annual Meeting 49
FORM 10-K