Fall 2019 line plan framework: revenue targets set before the line was drawn

What it is

Under the reset, the customization line had three tiers. Essentials were Nike's best sellers, open to customize all year. Seasonal premium was a set of curated packs. Studio was a small number of collaborations, sold for a limited time.

Essentials carried the business. In the fall 2018 plan they were 92% of revenue, with seasonal premium at 6% and studio at 2%. Khounlavong's review of the function lists misinformed line plans among the gaps he found when he arrived.

In April 2018 Khounlavong wrote a line plan framework for fall 2019, more than a year ahead of the season. His own marked-up copy is dated April 24. Version two is dated April 25.

What Khounlavong did

• Set three priorities: align the update cadence of the essential models, rebalance the portfolio, and provide a revenue and capacity framework.
• Set a season target of $45.2M, up 8.4% on the year before.
• Held essentials flat at $38.4M and moved the growth to the top two tiers. Seasonal premium was set at $4.5M, up 88%. Studio was set at $2.3M, up 112%. Essentials would fall from 92% of the business to 86%.
• Put the lifestyle essentials on a twelve-month update cycle, with each model assigned to one season. Spring took the modern Air Max models, summer the summer styles, fall and holiday the heritage models. He chose the split on three factors: revenue balance, workload balance and seasonal relevance.
• Set a revenue target for each seasonal premium story, and stated that the models in a pack had to be able to carry the pack's revenue.
• Defined two kinds of studio project: one led by a new model and its innovation, one led by a story and a pack. Each would run three weeks in market, with two of each in the season.
• Proposed ten edits to the initial fall 2019 line plan and six additions, listed by tier.
• Wrote up five problem stories, each with the challenge and a fix. He flagged one model because consumer sentiment for it was low. He recommended replacing another because the geographies had received it poorly. He recommended investing more in the Presto React because all geographies had received it well.

Results

• The planning calendar in his July 2018 strategy deck lists a merchandising framework date, September 10, among the gates for the coming seasons.
• The job description for his seat, dated July 2018, names the line plan framework first among the merchandising principles the role owns.
• Fall 2019 fell after he left the role in September 2018. The documents do not record how the season performed.

At a glance