Three strikes, but Nike is still not out

BEAVERTON,OR: Nike has emerged relatively unshaken from a negative publicity triple whammy that started with a much-published dialogue with a student who wanted the word 'sweatshop' printed on his customized sneakers, was followed by widespread controversy over conditions in the company's Indonesian factory and culminated with last week's profit warning.

BEAVERTON,OR: Nike has emerged relatively unshaken from a negative publicity triple whammy that started with a much-published dialogue with a student who wanted the word 'sweatshop' printed on his customized sneakers, was followed by widespread controversy over conditions in the company's Indonesian factory and culminated with last week's profit warning.

BEAVERTON,OR: Nike has emerged relatively unshaken from a negative publicity triple whammy that started with a much-published dialogue with a student who wanted the word 'sweatshop' printed on his customized sneakers, was followed by widespread controversy over conditions in the company's Indonesian factory and culminated with last week's profit warning.

But in at least two of the cases the company managed to walk away with some net benefit to its brand. The tough two weeks began February 22, when Global Alliance for Workers & Communities (GAWC) leaked a report commissioned by Nike to the Financial Times outlining allegations of mistreatments (including sexual abuse) of employees at Nike's sub-contracted plants in Indonesia.

Although the report was damning, Nike fared well in media coverage. Observers applauded the sportswear firm for its preemptive strike of commissioning the GAWC report, and the fact that it is committed to rectifying the situation.

However, by early last week, Nike was forced to reveal that its profit for the current quarter would miss predictions by 30% - a shortfall of dollars 100 million - because of a software glitch in its supply chain.

At the same time, the story of Jonah Peretti, the student who had asked Nike to inscribe 'sweatshop' on his sneakers, was picking up speed across the world's media.

On February 28, Nike's PR chief, director of global issues Vada Manager, appeared on NBC's Today show to defend the company's right to refuse the student's request.

Manager denied that the row had dented the brand's appeal. 'The timing wasn't the best, but no company would allow a derogatory name to be placed on its product.'

Manager said inquiries about NikeID, the program that offers customers the chance to buy personalized sneakers, had risen by 25% since the start of media coverage about the saga.

See Analysis, p.13.



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