Since the start of the athleisure trend, the athletic apparel space has become more popular—and more competitive—than ever before, with the likes of Lululemon, Adidas, Under Armour, and even Amazon battling for market share.
Now Nike (NYSE: NKE) is going on the offensive to expand its share of the ever-growing market.
The company is shifting how it does business so that it can better react to customer demands and shifts in consumer taste. Laurent Vasilescu, an analyst at Macquarie, has said Nike is now in “battleship mode” as it gears up to take back its crown as the king of the athletic apparel and sneaker market.
According to Vasilescu, Nike has roughly a million human workers in its supply chain and is working to speed up its manufacturing process by introducing more automation. Doing so would likely reduce costs and increase margins.
Nike is also focusing on improving its customer experience. In October, the company said it would be getting more selective with which of its retail partners it favors, saying it will begin focusing more attention on just 40 of its 30,000 retail partners to better control how its products are sold.
Not only is Nike focusing on improving its customer experience, but it is also trying to increase its margins by increasing the average selling price of its products through the introduction of new premium products including it’s newly released VaporMax sneakers which retail for $190.
Vasilescu has rated Nike an “outperform” with a price target of $72, which is 12.5% higher than today’s prices of around $64.