The Coronavirus continues to be spread around the world and now, Nike is beginning to feel the effects.
Coronavirus is something that the whole world has become aware of over the past couple of months. The virus started in Wuhan, China and quickly spread throughout the entire country. Now, Coronavirus is in over 35 countries and it continues to spread at an alarming rate. Some countries have created travel restrictions to stop the virus while other places are seeing stock market crashes. In fact, some of the biggest companies in the world are feeling the effects of one of the worst outbreaks we have seen in a long time.
According to Forbes, Nike has seen a $17 billion decrease in its market value. This decrease comes in light of the fact that China is one of Nike’s biggest markets. The country makes up 15 percent of Nike’s total revenue and in 2019, China accounted for 40 percent of the profits. China is also one of the fastest-growing markets which makes it highly important to Nike’s operations.
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The outbreak has caused Nike to close various stores throughout China and even the ones that are still open, have seen a steep decline in foot traffic. So much so, that operating hours have been affected. With this in mind, it shouldn’t be surprising that Nike had to experience a dip in its valuation.
Over the next few months, companies like Nike will be watching the Coronavirus closely. If the outbreak isn’t stopped, there could be some serious ramifications for the economy.