Nike (NKE)

Nike is the largest producer of athletic footwear and apparel, and it essentially commands the footwear market. That kind of dominance is very appealing.

As of November 30, 2008, Nike had more than $1.7 billion in cash on its balance sheet, compared to just $445.5 million in long-term debt. Nike's strong balance sheet and ability to weather the recession puts it in a great position to buy other companies at bargain prices. The company is reportedly in discussion to buy Quiksilver, Inc., a sportswear company geared mainly towards surfing and skateboarding. Quiksilver’s stock price rose 46 percent on Monday, January 26 to $2.21 per share, on speculation that the company could sell itself or its brands.

In 2002, Nike purchased the popular surfwear company Hurley International in a deal reported to be worth between $100 million and $140 million. The recession could open new opportunites for Nike to push into surfing, a market outside of its traditional core categoreis of soccer, basketball, running, men’s training, women’s fitness and sports culture.

The recent effort to open more retail locations, in conjunction with Nike's new emphasis on low-performance apparel, may add to Nike's bottom line.

Nike exploits its scale with wide brand recognition and aggressive marketing, showing a commitment to maintaining its bottom line.

Nike has diversified its footwear into the rapidly expanding action sports/low-performance footwear market with the acquisition of Converse and Hurley International. These products become increasingly more popular in times of economic downturns, when customers begin to shy away from Nike's high performance shoes that average $100/pair and begin buying more low-performance shoes (average $65/pair)

Nike's international expansion, primarily into developing countries like China, Russia, and Brazil, help promote the company's growth in sales as its domestic sales slow.