Nike Korea bleeds red ink in FY2021
Nike Korea went into the red in its 2021 fiscal year, but sales were up.
Nike Korea reported a net loss of 6 billion won ($5.4 million) for the year starting in June 2020 and ending last May, compared to a 30.6 billion won net profit the previous year. Sales were 1.45 trillion won, up 12.3 percent, according to a financial filing Tuesday.
The Korean unit of the global sports brand benefited from the popularity of sportswear during the Covid-19 pandemic, as demand for comfortable clothing increased.
Its sales were more than double 2011's 600.5 billion won.
Nike Korea's sales increase was consistent with performances by other sportswear brands during the pandemic. Brand X Corporation, which sells the Xexymix sports brand, saw sales jump more than 40 percent on year in the first half. Sales of Andar, another local sportswear brand, were up 5 percent on year to 75.9 billion won.
Nike Korea's annual sales surpassed those of luxury brand Louis Vuitton Korea, which reported 1.05 trillion won in sales in 2020, up 33 percent on year. Annual sales for Chanel Korea during the same period were 929.57 billion won, down 13 percent on year.
Nike Korea’s net loss was partly due to an increase in marketing and administrative expenses, which jumped 13 percent on year to 208.5 billion won.
The Korean unit of Nike was established in 2010.
The company reported its earnings for the first time in a decade after a Korean law requiring limited liability companies with more than 50 billion won in annual sales to undergo external audits starting this year.
BY JIN MIN-JI [firstname.lastname@example.org]