Nike Job Cuts in 2018
A store closure and layoffs are coming to Nike Inc (NYSE:NKE) in 2018. The footwear manufacturing company filed a Workers Adjust and Retraining Notification (WARN) with the New York State Department of Labor indicating it will shutter its Niketown Midtown store and lay off 357 employees in March.
The Nike job cuts in 2018 come on the heels of an announced 1,400 job cuts in 2017. Nike’s announced store closing and retail layoffs suggest that the retail apocalypse, which has already claimed 6,985 store closures and tens of thousands of jobs, will gain momentum in 2018.
Trump’s Real Estate to Lose an Important Tenant as Nike to Close Store in 2018
After announcing two mass layoffs in 2017, Nike is kicking off 2018 on the same sour note. The company said it is closing its flagship store at 6 East 57th Street in New York City in March 2018. The closure will result in 357 job losses.
The closure will also hit President Trump in the pocketbook. Trump’s private real estate empire includes the 57th Street address. The property, known as Niketown, is, for now, the largest occupied by a single tenant. With Nike running for the exits, the Trump Organization will need to find a new tenant and come up with a new identity for the $253.0-million site.
That will be a lot tougher to do than it sounds. The building covers 65,000 square feet of prime retail space just off Fifth Avenue. While this may be in one of the most famous retail locations in the world, the demand for costly retail real estate simply isn’t there.
First, there aren’t many retailers that could occupy that kind of space. A department store would be the obvious choice but there aren’t any expanding. If anything, thanks to the rise of online shopping, most major department stores are reducing their footprint.
As a side note, just 9.7% of Manhattan voted for Donald Trump in the November 2016 elections; the repercussions of which are still being felt by some retailers in the area. Tiffany’s, which is right next door to Niketown at 727 5th Ave, said “post-election traffic disruptions,” were partly to blame for a 14% drop in 2016 holiday sales.
Nike is not leaving Manhattan altogether. The company is opening a new flagship store just five blocks away at 650 Fifth Ave at 52nd Street in early 2019. The athletic footwear company signed a 15-year lease covering seven floors and 69,000 square feet; the building’s entire retail space.
But 2019 is a long ways away for the 357 employees who will be shown the door in March 2018.
Nike Laid Off 745 Employees in Oregon in 2017
Despite plans for a new flagship store in New York City, 2017 was not a great year for Nike employees. In fact, Nike announced two major rounds of layoffs in 2017. In June, the company announced a restructuring initiative, which will result in a two-percent global reduction in headcount. At the end of 2016, Nike had 70,000 employees; the announced layoffs work out to around 1,400 jobs.
To that end, Nike killed a total of 745 jobs at its corporate headquarters in Washington County, Oregon; more than half of the total planned global layoffs. The first round of layoffs took place in July, with 255 employees losing their jobs. Another 490 were laid off at the end of September.
“WARN Details,” New York State Department of Labor, December 14, 2017.
“New York Results,” The New York Times, last accessed December 18, 2017.
“New Flagship Store Planned For New York City,” Nike Inc, December 4, 2017.
“SL Green and Jeff Sutton Sign 69,000 Square-Foot Lease with Nike for New Retail Store at 650 Fifth Avenue,” SL Green Realty Corp., December 1, 2017.
“Nike, Inc., Announces New Consumer Direct Offense: A Faster Pipeline To Serve Customers Personally, At Scale,” Nike Inc, June 15, 2017.