Turnover rises but Nike profits slump in the UK
The company, whose head office is based on the Doxford International Business Park in the city, posted a 28% drop in pre-tax profit to £7.8m in the year to May 31, 2012. Operating profit also fell from £11.6m in 2011 to £8m last year.
Nike’s smaller profits came despite turnover rising to £78.4m, compared with £70.4m in the year to May 31, 2011. The performance was described as “satisfactory” by the company’s directors.
They added that the loss included an £2.3m exceptional charge that related to a “provision for restructuring as part of a western European realignment of work practices and resources within the Nike brand”.
Underlying administrative expenses also increased as a result of additional marketing investment in the year, including campaigns in the build-up to the London 2012 Olympics.
Nike (UK) acts as the UK agent for the distribution of the brand’s footwear, apparel and accessories. It employs more than 280 staff from its North East base.
The company’s overall parent is Nike Inc, which in December reported a 7% rise in global revenues to $6bn in the three months to November 30, 2012. Net profit fell 18%to $384m compared with the same period a year earlier.
Mark Parker, president and chief executive of Nike Inc, said: “We have a focused and flexible portfolio that allows us to target the biggest growth opportunities at all levels - brand, category and product.
“We stay connected with our consumers and that enables us to deliver innovations that excite the market.”