Nike Factory Store basketball: planning the second life of each shoe

What it is

Nike Factory Stores are Nike's own outlet stores. They sell two kinds of basketball shoe: closeouts, which are inline models at the end of their run, and rebuys, which are models made again for the channel. By 2012 the factory stores were becoming a larger part of the Basketball category's business.

Khounlavong's fiscal 2015 goals describe the aim: a clean and holistic marketplace, consumer relevant buy plans with factory store partners, and a seamless exit strategy.

What Khounlavong did

• Set a cadence with the factory store buying team in fiscal 2012. His review gives three aims: understand their retail performance, drive a more consumer relevant assortment plan, and influence their buys.
• Worked from a factory store footwear page for fall 2012 that ran by price from the $110 Hyperfuse to the $65 Air Visi Pro III, with a team page led by the Zoom Soldier VI at $120.
• Built the fiscal 2014 and 2015 factory store assortment plan for Basketball, which went through four versions by June 2014. It maps each inline model, from the Hyperdunk at $140 to the Baseline Low at $60, to the factory store model that follows it, season by season through summer 2016.
• Drove the factory store assortment for All-Star Weekend in fiscal 2014.
• Used the channel in margin planning. The fall 2013 margin review notes that the Air Visi Pro III, as a factory store model, drove a higher margin for Nike at the regional level.
• Put the Zoom Soldier on the factory store agenda. His meeting agenda of October 2013 lists a Zoom Soldier request under factory stores, and his agenda of April 2015 lists the Soldier carry over for holiday 2015 and spring 2016.
• Worked the buy plans with factory store partners in fiscal 2015, to build equity in the stores, protect profitability and give each model an exit.
• Included the factory store on the Dallas market trip in January 2015. The recap rated it a market leader in presentation, with a strong assortment of rebuys.

Results

• Spring 2015 basketball footwear sales in Nike Factory Stores were $16.52M against $15.17M the year before, up 9% or $1.35M. The figures come from the factory store team's season recap.
• Rebuys were $9.0M against $6.7M, up 33%, and made up 55% of basketball footwear in the channel.
• It was the first spring with the Zoom Soldier as a rebuy, in 75 doors. The Zoom Soldier VII was the second best selling style of the season at $1.45M.
• The Hyper series, rebuy and closeout together, produced $8.7M, or 53% of the channel's basketball footwear.
• Year to date, basketball footwear in the channel was up 11%.
• Margin went the other way. The recap shows footwear margin at 41% against 46% the year before, and records that port and distribution center delays hurt the season.

At a glance