Apparel Merchandising

Assignment - 2

Submitted To:
Prof. Dr. Ranjan Kumar Saha

Submitted By:
Lara Narang (BFT/22/94)
Manan Suriya (BFT/22/110)

Department of Fashion Technology

National Institute of Fashion Technology, Mumbai
Introduction
Nike’s journey began in the 1960s when University of Oregon track coach Bill Bowerman and
runner Phil Knight set out to rethink athletic footwear. What started as a small venture
distributing Japanese Onitsuka Tiger running shoes under the name Blue Ribbon Sports quickly
grew into a company with much bigger ambitions.

In 1971, Blue Ribbon Sports officially rebranded as Nike, named after the Greek goddess of
victory. With the introduction of the iconic swoosh logo, Nike began shaping a brand identity
built on innovation, performance, and a deep understanding of athletes’ needs.

Today, Nike is far more than a sportswear company. It is a global force inspiring athletes around
the world. Guided by the belief that if you have a body, you are an athlete, Nike combines
innovation, design, and storytelling to empower individuals at every level of sport and
movement.

From breakthrough technologies and sustainable materials to bold campaigns and community
initiatives, Nike continues to push the boundaries of possibility. It is a brand that leads
conversations, sets cultural trends, and constantly redefines what it means to be an athlete.

Financials (Currency in USD)

Breakdown 5/31/2024 5/31/2023 5/31/2022 5/31/2021

Total Revenue 51,362,000 51,217,000 46,710,000 44,538,000

Gross Profit 22,887,000 22,292,000 21,479,000 19,962,000

EBIDTA 7,155,000 6,774,000 7,515,000 7,734,000

Operating Income 6,311,000 5,915,000 6,675,000 6,937,000

Net Income 5,700,000 5,070,000 6,046,000 5,727,000

How does Nike’s Supply Chain works?
1. Global Outsourcing Model
Nike outsources all manufacturing to over 500 independent factories across 42 countries,
specializing in footwear, apparel, and equipment. It does not own factories, which allows it to
stay agile and minimize operational overhead.

2. Key Manufacturing Hubs

Vietnam: Produces nearly 50% of Nike’s footwear.
China: Important for both footwear and apparel, though production is gradually shifting.
Indonesia, Cambodia, India, Thailand: Rising hubs for diversifying risk and managing costs.

3. Strategic Supplier Relationships

103 strategic suppliers handle 80% of production volume.
Major suppliers include:
Pou Chen Group, Fulgent Sun Group (footwear)
Shenzhou International, Eagle Nice, Delta Galil (apparel)

4. Operational Excellence and Savings

Lean Manufacturing: Reduces waste, improves efficiency, and drives cost savings.
Savings Impact: Nike’s lean supply chain saves about $0.15 per unit compared to traditional
models. With over 900 million units sold annually, Nike gains a significant competitive edge.
Demand Sensing and Predictive Analytics: Helps align production with real-time market
demand.

5. Distribution and DTC (Direct-to-Consumer) Shift

Products are shipped to 57 distribution centers globally, with 5 major centers in Memphis,
USA.
Although wholesale remains dominant, Nike is increasingly focusing on direct-to-consumer
(DTC) sales through e-commerce and branded stores.
DTC allows better consumer connection but also create challenges like managing reverse
logistics for unsold inventory through secondary markets like outlets and value retailers.

6. Sustainability and Ethics

Move to Zero Initiative: Targeting zero carbon and zero waste across operations.
Supplier Code of Conduct: Enforces strict labor and environmental standards at factories.
Transparency: Nike publicly discloses its supplier lists.
Buying Cycle
The buying cycle in fashion and retail refers to the key steps buyers take to plan, purchase, and
launch new product ranges. While it varies between companies, it usually spans about a year,
starting with a review of current season sales and ending with new products hitting stores.

For Nike, the year is divided into four key fiscal seasons that align with major sports events,
consumer behavior, and product innovation timelines:

December – March-May
February
Winter Spring

September – Fall Summer June to August

November

STAGES OF BUYING CYCLE

STAGE 1: Fashion Forecasting
Nike stays ahead in fashion by tracking events like Off-White’s basketball court show and trends
such as the "Pink Pilates Princess" movement. They use data from platforms like Instagram to
refine designs and marketing. Collaborations with designers like Virgil Abloh keep Nike
culturally relevant to both athletic and fashion-forward audiences.
Color Forecasting
Color forecasting is key for Nike’s apparel production, helping them design with colors in
demand at launch. It informs material sourcing and aligns marketing with global trends. By
using forecasts from agencies like WGSN and internal design journals, Nike stays ahead of
consumer preferences, leading to stronger sales, less waste, and more relevant products.

Yarn and Fabric Forecasting

Nike forecasts yarn and fabric trends using WGSN insights, internal R&D, and sourcing at
major events like Yarn Expo(Shanghai) and Functional Fabric Fair(Portland). Their focus is on
sustainable, high-performance materials to stay ahead of consumer and market demands,
ensuring innovation aligns with future lifestyle and athletic needs.
Design Forecasting
Nike’s design forecasting blends trend analysis, cultural insights, and creative collaborations.
They engage in events like Paris Couture Week and partner with top designers, drawing
inspiration from cultural nostalgia to keep their apparel fresh, relevant, and innovative.

STAGE 2: Review of Current Season Sale

Nike’s apparel sales in Fiscal Q3 2025 fall 3% to $3.19 billion. While North America grows by
7%, Greater China sees a 17% decline. The merchandise department reviews the past season’s
performance, identifying best-sellers and poor-sellers to guide the buying team’s strategy. Nike
addresses these challenges with product innovation, digital engagement, and stronger regional
partnerships. The company also focuses on enhancing consumer experiences and leveraging
data-driven insights to stay ahead of market trends and improve future performance.

STAGE 3: Budget Planning

Nike’s budget planning involves merchandisers and buyers working together, using last season’s
sales to guide decisions. The data helps identify top-performing products and areas to improve,
directing resources for new products and regional strategies.

STAGE 4: Comparative Shopping

Nike's comparative shopping strategy involves analyzing competitors' offerings, pricing, and
market trends to ensure its products remain competitive. By studying rival brands, it identifies
gaps, improves product features, and adjusts pricing strategies.
STAGE 5: Directional Shopping
It involves buyers traveling to fashion hubs like Paris, London, Milan, and New York to gather
inspiration for the upcoming season's designs. Depending on the product range, they observe
trends in shapes, colors, and fabrics, often purchasing garments as reference samples.

STAGE 6: Garment Sample Sourcing for Range

It involves purchasing samples from various stores during directional shopping that align with
the buyer’s product range or reflect emerging trends. These samples serve as references for the
upcoming season’s designs and help guide the buyer’s selection process.

STAGE 7: Range Planning

It involves buyers defining the collection’s styles, fabrics, designs, suppliers, and pricing to align
with market trends. This ensures the collection is appealing and cost-effective for customers.

STAGE 8: Pre-Selection of Garment Samples

It is done after the range planning stage, where buyers present garment samples to the buying,
merchandising, and QC teams. At this point, feedback is gathered, and necessary changes are
made to strengthen the final range.
STAGE 9: Final Range Selection
Final range selection follows pre-selection and takes about two weeks. Buyers finalize styles,
coordinate changes with suppliers, and quickly approve or adjust samples, as most groundwork
is already completed.

STAGE 10: Price Negotiation with supplier

Once the final range is set, buyers inform suppliers of any changes and renegotiate prices based
on design, fabric, or trim modifications.

STAGE 11: Confirmation of order to suppliers

After finalizing price negotiations, the buyer confirms the order by issuing a master L/C (Letter
of Credit) to the selected supplier..

STAGE 12: Proto Sample Approval

Proto-sample approval involves creating initial samples after receiving the order sheets. These
samples, made in similar or substitute fabrics, are used to check the garment’s measurements,
style, and fit based on actual specifications.

STAGE 13: Fit Sample Approval

Fit sample approval requires making samples based on precise measurements, using the same or
substitute fabric. These are sent to the buyer for approval of fit and garment drape.

STAGE 14: Size-Set Sample Approval

Size-set sample approval requires making samples in actual fabrics and trims, as per the order
specifications. Buyers may request samples in specific sizes and colors or swatches for approval
before production begins.

STAGE 15: Pre-Production Sample Approval

Size-set samples are made with actual production fabric and bulk trims, representing the final
product. Vendors must obtain buyer approval before starting bulk production.
STAGE 16: Bulk Garment Manufacturing
Once the pre-production samples are approved, bulk production of garments begins.

STAGE 17: Production Sample Approval

Production samples are submitted before shipment to secure the buyer’s approval. They must
meet all quality standards, as buyers may evaluate them thoroughly for any detail.

STAGE 18: Shipment of Order

The vendor prepares all necessary shipping documents and arranges the booking with the
freight forwarder for the dispatch of garments.

STAGE 19: Recieving of Product in Warehouse

Garments are first loaded onto a feeder vessel, transferred to a mother vessel for overseas
shipment, transported to the destination port, and finally delivered to the buyer’s warehouse.

STAGE 20: Delievery of Product to Retailer

Once the garments arrive at the buyer’s warehouse, they are dispatched to the buyer’s regional
distribution centers and then further distributed to the retailers' warehouses.

STAGE 21: Final Product in Store

After reaching the retailer’s warehouse, garments are dispatched to individual Nike stores for
display and sale. This ensures that the latest collections are available for customers to explore
and purchase.
 Buying Cycle

Link as well as attached images below

https://1drv.ms/x/c/482078648aff0f2f/EbULustIOa5KkBecE0EBdScBhVIC5qNypknldgnYsDVbTA