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Why Nike's Newest Store Represents The Future Of Its Brick-And-Mortar Strategy

Nike's New Store: A Manifestation Of Brick-And-Mortar Strategy

Nike Inc NKE 1.43% is slated to open its new store in Soho, New York, officially on November 11. It is a five-story, 55,000 square foot store.

Barclays’ Matthew McClintock maintains an Overweight rating on the company, with a price target of $65.

The New Store

McClintock mentioned that “the store incorporates many new features that create an immersive experience into various sports.”

For soccer, the store has 400 sq. ft. for boots and staffed with a soccer expert, while for running, there is an “immersive treadmill running experience” to help customers try out the technical and comfort aspects of their choice of shoes.

“In basketball, the floor's 23 foot ceilings cover a 700 sq. ft. playable basketball court that also creates an immersive virtual experience and is staffed by an expert in basketball,” the analyst explained.

Innovations

The company has also added other innovations, such as an Airforce One Nike ID segment that will rotate creations of local designers every two weeks.

McClintock believes the store represents “the next step in the physical brick and mortar channel towards experiential retailing, something that few traditional apparel/ footwear brands can match.”

On November 8, Nike signed a new “lifetime” deal with Real Madrid star, Christiano Ronaldo. Ronaldo is the third athlete to have signed such a deal with the company.

However, Nike is expected to continue to face challenges in the medium term, especially give the increasing competition in the United States.

DateFirmActionFromTo
Nov 2016WedbushInitiates Coverage OnNeutral
Oct 2016Bank of AmericaDowngradesNeutralUnderperform
Oct 2016OppenheimerInitiates Coverage OnPerform

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