Nike scraps Phoenix manufacturing plant planJuly 29, 2020
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Because of the coronavirus pandemic, Nike is ditching its plans to make soles for its Nike Air shoes in a Phoenix suburb, the world’s largest sports apparel maker announced Tuesday.
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The company had decided to invest $184 million in its third U.S. manufacturing line for Nike Air sneakers in Goodyear, Arizona.
“We are experiencing unprecedented times and due to the COVID-19 impact we will no longer be investing in our Goodyear facility,” Greg Rossiter, a Nike spokesman, said.
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Nike said last year it planned to open the plant in 2020.
Rossiter did not tell The Associated Press whether the plant had begun operating.
Nike lost $790 million in the fourth quarter, as soaring digital sales couldn’t make up for the loss of revenue from shuttered stores in most of the world. The company said last month that its revenue fell 38 percent to $6.31 billion in the three-month period ending May 31.
The company grappled with costs associated with reducing built-up inventory, including wholesale markdowns and factory order cancellations. Product shipments to wholesale customers fell 50% during the period. Chief Financial Officer Matthew Friend said the company expects its inventory, which rose 30% in the fourth quarter, to be right-sized by the end of the second quarter.
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Nike’s Goodyear facility was the subject of controversy last year when Arizona Gov. Doug Ducey threatened to pull state incentives because of the company’s decision not to sell the Nike Air Max 1 USA shoe, which included a Revolutionary-era emblem known as the Betsy Ross flag.
Former NFL quarterback Colin Kaepernick, who has a high-profile endorsement deal with Nike, told the company the flag recalls an era when Black Americans were enslaved and that it has been appropriated by white nationalist groups, a person familiar with the conversation told The AP last year.
The Associated Press contributed to this report.
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