Nike Cuts China Suppliers

Here’s a straw in the wind, and a bad one at that. Nike is dropping three of its China suppliers because of the global slowdown in demand for its sports shoes and apparel, and saying that more may follow as part of a global restructuring now in review. Nike uses 180 suppliers in China, so four represents a tiny portion — less than 2% — but the company has weathered the fall off in consumer demand in rich countries better than most, at least until now.

All three suppliers make shoes and rely heavily on Nike for orders. Their contracts will be wound down over the next six months to a year to give them time to find new customers. Tough task right now, unless they can turn to the domestic market. Otherwise they will join the growing ranks of export-oriented companies — 62,000 in Guangdong alone last year — shuttering their doors for good.

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