![\"\"](\"https:\/\/friendburst.com\/blog-new\/wp-content\/uploads\/2012\/08\/LABRON-JAMES-300-BUCKS-SNEAKERS.jpg\")
<\/p>\n<\/p>\n
Or how does $1.25 a day, translate into $300.00 sneakers ?
\nNike’s LeBron Sneakers to Test $300 Limit<\/p>\n
The Wall Street Journal By Shelly Banjo | The Wall Street Journal \u2013 Tue, Aug 21, 2012 9:11 AM EDT<\/p>\n
Nike Inc.
\nRELATED QUOTES
\nSymbol\u00a0\u00a0\u00a0 Price\u00a0\u00a0\u00a0 Change
\nNKE\u00a0\u00a0\u00a0 95.46\u00a0\u00a0\u00a0 -0.39
\nNike Inc. (NKE) is raising the prices of its sneakers, assuming that the brand’s cachet will carry it through a period when<\/p>\n
many of its shoppers are scrounging for discounts.<\/p>\n
As labor, materials and shipping costs increase, Nike is raising shoe and clothing prices by 5% to 10%, analysts say. A test<\/p>\n
of the approach comes this fall, when Nike will debut its priciest sneaker yet\u2014an expected $315 LeBron James basketball shoe<\/p>\n
that includes its own electronics.<\/p>\n
The price leaps come after Nike’s gross margins dropped to 42.8% from 44.3% in its most recent quarter ending May 31, the<\/p>\n
sixth-straight year-to-year quarterly decline. Nike’s margins are now lower than most of its direct competitors, rival Adidas<\/p>\n
AG and apparel maker Under Armour Inc.<\/p>\n
The price increases, from a company whose trendy footwear sometimes generates long lines of avid buyers, may test even the<\/p>\n
most dedicated Nike fans.<\/p>\n
“Prices are getting crazy excessive and as long as we continue to buy sneakers, Nike is going to keep increasing the prices,”<\/p>\n
said Donell Brown, 30, who owns a cleaning services company in Dearborn, Mich.<\/p>\n
(Photo: Nike)Mr. Brown said he and his friends have been posting messages on Twitter and YouTube, urging other longtime<\/p>\n
sneaker fans not to buy the pricier LeBron shoes and to forgo waiting in line for new sneaker releases.<\/p>\n
Nike’s price increases are also being felt at the lower end: The venerable Converse Chuck Taylor All-Star sneaker now costs<\/p>\n
$50 compared with $45 a year ago.<\/p>\n
Nike isn’t the only sneaker maker asking customers to pay more. Adidas’s signature three-striped Superstar shoes now cost<\/p>\n
$70, nearly 8% more than a year ago. Overall basketball shoe prices were up 9.4% compared with a year before as of June,<\/p>\n
according to market researcher NPD Group Inc., while soccer cleats jumped 15.5% and running shoes climbed 5.5%.<\/p>\n
Nike’s basketball and soccer shoes make up about half its North American business, according to analysts.<\/p>\n
Some families are already noting sticker shock as they start back-to-school shopping.<\/p>\n
“Sneaker prices have definitely shot up this year,” said Lucy Rangel, 37 years old, who was shopping for sneakers with her<\/p>\n
two teenage daughters at a Foot Locker store in Dallas.<\/p>\n
Ms. Rangel said she paid $114 for a new pair of pink and purple Nike sneakers for her 12-year-old daughter, up from $69.99<\/p>\n
she paid last year for a similar pair.<\/p>\n
While many retailers try to attract budget-conscious consumers by touting price cuts, analysts say shoppers are willing to<\/p>\n
spend more on products with newer technology and fresher styles. Footwear companies are strategically testing price<\/p>\n
increases, typically raising them only when they come out with updated products.<\/p>\n
Nike is known for some pricey shoes, going back to its first pair of Air Jordans. A new version of the Air Jordan is expected<\/p>\n
in December at $185, up from its original 1985 price of $64.99 (or $138.38 in today’s dollars), a 33% increase when adjusted<\/p>\n
for inflation.<\/p>\n
Nike is “not arbitrarily taking up prices,” said spokeswoman Mary Remuzzi. “We are constantly looking at ways to enhance the<\/p>\n
product line with new innovation and product attributes.”<\/p>\n
The coming $315 LeBron X Nike Plus, due in the fall, is expected to come embedded with motion sensors that can measure how<\/p>\n
high players jump. The LeBron 9 PS Elite basketball shoes, which currently retail for $250, feature Nike’s signature swoosh<\/p>\n
in metallic gold.<\/p>\n
Nike, based in Beaverton, Ore., says it is passing along price increases because many of key materials, such as cotton, have<\/p>\n
risen in price over the past 18 months. Prices did moderate somewhat in the past quarter.<\/p>\n
Nike also faces rising labor costs in China, where it manufactures a third of its products.<\/p>\n
The company’s shares, which have soared since the recession as it continued to report solid growth, plunged 10% in June after<\/p>\n
it reported profit dropped nearly 8% from a year earlier to $549 million, or $1.17 a share. Shares closed at $95.77 on Monday<\/p>\n
and are now flat for the year after hitting an all-time high of $114.81 on May 3.<\/p>\n
Adidas is struggling with similar pressures: It said last month it is closing its only company-owned apparel factory in China<\/p>\n
to “improve efficiency.” Adidas’s increased labor and materials costs drove gross profit margins down to 48.2% from 49.2%.<\/p>\n
“We are trying to mitigate the costs by manufacturing our products more efficiently,” said Katja Schreiber, an Adidas<\/p>\n
spokeswoman. “In some instances we look to increase price, usually in areas where we launch new, innovative products.”<\/p>\n
Link below<\/p>\n
http:\/\/finance.yahoo.com\/news\/nikes-lebron-sneakers-test-300-000400159.html<\/p>\n