Nike Sport - Sportswear - Rated 4.2

In 1963, Bill Bowerman and Philip Knight founded Nike with the idea of importing high-performance, affordable sports shoes from Japan, challenging the dominance of German brands like Adidas and Puma. By 1981, Nike had become the leading sports shoe brand in the United States, before going public and launching iconic products such as the Air Force One and the Air Jordan basketball sneakers. However, in 1997, the company faced controversy after accusations that its subcontractors employed child labor. In 2021, Nike felt the impact of the Covid-19 crisis, leading to the withdrawal of some athlete sponsorships and the non-renewal of global contracts. Additionally, allegations have emerged regarding deceptive business practices and complicity in concealing forced labor, particularly in connection with the treatment of Uyghurs in Xinjiang, China. Nike’s involvement in lobbying efforts to weaken legislation banning the import of products from Xinjiang further exacerbated its controversies and challenges in maintaining its reputation and market position. Tax Optimization The *Paradise Papers*, published in November 2017, revealed that the sports equipment manufacturer engaged in tax optimization through a series of financial arrangements between the Netherlands and the Bahamas, allowing it, according to *Le Monde*, to "reduce its effective tax rate to 2% in Europe" compared to an average of 25% for European companies. Specifically, since 2014, Nike has been channeling all its European revenue to a Dutch subsidiary, which then transfers the brand usage rights to another entity, Nike Innovate, artificially depleting its profits. Nike Innovate exploits a loophole in Dutch legislation called the "CV-BV" structure: Dutch tax authorities consider this subsidiary should be taxed in the United States, and vice versa. As a result, Nike Innovate pays no taxes at all.