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Just Blew It? Nike Suffers Slow Sales

Look down at your feet. What kind of shoes do you have on? What about the person next to you? If either of you is wearing sneakers, there's about a 50-50 chance that they are Nikes. That's because almost half the sneakers that are bought in the U.S. are made by Nike.

The Nike corporation has been outrunning the competition for years. But the race between Nike and other shoe companies like Reebok and Adidas is getting closer. Last week, Nike announced that its profits are 70% lower than they were at this time last year. To save money, the company is firing 1,600 workers.

What is tripping up Nike's business? The company's founder and chairman, Phil Knight, blamed the bad economy in Asia. Nike had hoped to expand its sales in Asia. But many Asian customers don't have extra money to spend on expensive shoes right now.

Nike has also faced accusations that they use illegal child labor in some factories. Nike denies this, but the charges may have hurt its business.

The biggest reason for Nike's slow sales may be that the shoes just don't seem as cool as they once did. Nike may need to rethink its shoe designs if it wants to win back young buyers. "Nikes have too many flaps, too much Velcro, swirls and see-through spots," says Ty Vandergriff, 17, of Beaverton, Oregon. "Tell you the truth, the shoes are just ugly."

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