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Adapt the model
Adapt the model
Nike's retail strategy in the U.S. is to run a small number of Niketown stores and sell mostly through national retail chains. But since China has fewer malls, the company had to alter its plan, opening more than 5,000 shops with retail partners -- many of them small boutiques focusing on a single sport. Without retail chain competition, there's less discounting -- one reason profit margins in China are 37%, compared with 23% in North America, estimates Credit Suisse. It's a model Nike may bring back to the U.S.: It launched a basketball-specific House of Hoops store with Foot Locker in 2007 and added nine new locations last fall.

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Last updated February 03 2011: 6:00 AM ET
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