BrandDunk

Branding the World of Sports

Nike looking to gobble up competition

Posted by ZA on May 6, 2010

Nike announced that they have targeted annual revenue of $27 billion by 2015.  Nike plans to achieve that growth through expansion into developing markets (China & Eastern Europe), by expanding their existing line of products and by pursuing “acquisitions and partnerships”.  That target is a big increase (near 50%) from Nike’s 2010 revenue projection of $19 billion, so to achieve their goal the Swoosh is going to have to be very aggressive.

This announcement only solidifies my opinion that Nike will try to acquire rival Under Armour.  Under Armour reported 2009 revenue of just under $900 million dollars, which should put UA in the $1 billion annual revenue range in 2010.  So Nike not only gobbles up a strong competitor and gains ground in the performance sportswear category, they would also be adding $1 billion plus dollars in revenue towards their bottom line.  That billion plus in extra revenue is more than Nike is receiving from their current subsidiaries; Cole Haan, Converse, Hurley and Umbro.  So Under Armour has to look attractive and I think Nike buys them this year.

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2 Responses to “Nike looking to gobble up competition”

  1. Wad said

    I am surprised it hasn’t happened yet myself. They have the cash even if double today’s current mkt price.

    • ZA said

      I think its only a matter of time before Nike makes a big move. They are in a strong position and have the cash to do it. Better for them to grab Under Armour now, then let UA continue to grow into a strong competitor. Under Armour strengthens Nike’s position in apparel and gives Nike an immediate revenue boost of close to $1 billion.

      Zach

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