The footwear and apparel giant Nike said last week that the rising price of leather, a "significant" raw material for its footwear, is likely to hurt gross margins in2002.

"If these prices continue to rise, fiscal year 2002 gross margins may be negatively affected," said the Beaverton, Oregon-based company. The disclosure was made in the company’s quarterly statement to the US Securities and Exchange Commission, filed last week. In submitting the report, Nike also said that it is to take a charge of 10 cents a share for the financial quarter, as part of its alignment with a new accounting rule.

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