NIKE, Inc. has announced a new strategic partnership with private equity firm Apollo Global Management, LLC, aimed at building a transparent and ethical apparel supply chain in the Americas. Through the partnership, Nike aims to increase regional manufacturing capabilities, enable quicker delivery of more customized product to consumers and drive investment in sustainability.
To establish the partnership, Apollo has established a new apparel supply chain company that is acquiring existing apparel suppliers in North and Central America, and plans to invest in advancing their manufacturing operations and expertise to produce innovative, technical and customized apparel. This new company also expects to acquire additional textile and apparel suppliers in the Americas in order to broaden and diversify its capabilities and product offerings. This will create a more vertically integrated apparel ecosystem – from materials suppliers and apparel manufacturers to final embellishment, warehousing and logistics.
“We are excited to be working with Apollo to rethink a new supply chain model to revolutionize apparel manufacturing in the Americas,” says Nike COO Eric Sprunk. “The new company, under Apollo’s leadership, is committed to embedding sustainability and transparency into the business, investing in new technology, vertically integrating critical elements of the supply chain and delivering the best Nike performance product to our retail and sports partners.”
“We see a tremendous opportunity to meet the rising demand for responsive apparel manufacturing to serve increasing consumer expectations for products delivered when and where they want them. We intend to work with management to develop a regional supplier capable of servicing the needs of a wide variety of customers, and we are particularly enthusiastic to be working with such an iconic brand as Nike,” says Josh Harris, co-founder and Senior Managing Director of Apollo. “While Nike has not made a capital investment in the company, this strategic partnership is a testament to Nike’s commitment to increasing regional manufacturing capabilities, driving investment in innovation and creating long-term growth.”
While terms of the agreements were not disclosed, Apollo says the new supply chain company has already acquired two businesses to form the cornerstone of this strategy: the apparel manufacturer, New Holland; and the embellishment, warehousing and logistics operator,ArtFX. The investment is made by the Apollo-managed Special Situations I fund.
This isn’t Nike’s first move to create “the supply chain of the future”: In May, the sportswear giant unveiled the latest expansion of its European Logistics Campus in Belgium. The expansion will make Nike’s European operations more efficient, more responsive and more sustainable, enabling growth by serving consumers across Nike.com, as well as its retail and wholesale partners in 38 countries, all from a single inventory location. Sustainable innovation informed all aspects of the facility – ex: it’s powered by 100 percent renewable energy, the structure was created to minimize its footprint from both an operational and a materials standpoint – emphasizing Nike’s vision for a low-carbon, closed-loop future as part of its growth strategy.
*This story first appeared on Sustainable Brands