Due to the coronavirus pandemic, Nike is resetting its plans to make soles for Nike Air shoes in the suburbs of Phoenix, as announced on Tuesday by the world’s largest sportswear manufacturer.
The company has decided to invest $ 184 million in its third Nike Air sneaker production line in Goodyear, Arizona.
“We are going through unprecedented times, and due to the impact of COVID-19, we will no longer invest in our Goodyear center,” said Nike spokesman Greg Rossiter.
COMPLETE FOX BUSINESS ON THE ROAD, CLICK HERE
Last year, Nike announced plans to open the plant in 2020.
Rossiter did not tell the Associated Press whether the plant was up and running.
In the fourth quarter, Nike lost $ 790 million as growing digital sales failed to offset the loss of revenue from closed stores in most countries. Last month, the company said its revenue fell 38 percent to $ 6.31 billion for the three-month period ended May 31.
The company faced costs associated with a reduction in accumulated inventory, including wholesale marks and the cancellation of factory orders. Shipments of goods to wholesale buyers during this period decreased by 50%. Chief Financial Officer Matthew Fred said the company expects its inventory, which rose 30% in the fourth quarter, to be adequate by the end of the second quarter.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
Last year, Nike’s Goodyear became the subject of controversy when Arizona Gov. Doug Ducey threatened to collect government incentives over the company’s decision not to sell Nike Air Max 1 shoes, which included the Revolution logo, known as the Betsy Ross flag.
Former NFL defender Colin Copernicus, who has a high-profile deal with Nike, told the company that the flag commemorates an era when black Americans were enslaved and was appropriated by white nationalist groups, a man familiar with the conversation told the AP last year.
The Associated Press contributed to this report.