Saturday, 6 September 2014

Nike Is Saving A Ton Of Money On Its New Flyknit Shoes

Nike's new Flyknit technology is saving the company a ton of money.

The Flyknit material, which debuted two years ago, is lightweight, minimalist, and fits like socks.

Nike uses "automated, high-tech knitting [technology] to 'weave' the shoe's upper" half into one piece, instead of several pieces that are stitched together, according to a recent research note by Deutsche Bank.

The technology reduces labor costs by up to 50% and cuts material usage by up to 20%, resulting in .25% higher margins, analysts wrote.

The Flyknit shoes retail for $120 to $150 on Nike's website.

Nike is also utilizing 3-D printing machines to build the soles of some of its shoes, including the Vapor Laser Talon soccer cleat.

"Nike is transforming its footwear manufacturing process from a low value add, labor intensive process to one that is more automated, high value add using the latest technologies," analysts wrote.

Adidas is leveraging similar technology "and is targeting a fully automated footwear production platform," they noted.

Adidas' version of Flyknit is called Primeknit.
http://www.businessinsider.in/Nike-Is-Saving-A-Ton-Of-Money-On-Its-New-Flyknit-Shoes/articleshow/41814679.cms

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