After two decades of steady growth, Nike — the company famous for its sportswear and, above all, its designer sneakers with the famous “mustache” — is facing an unprecedented crisis. In June, in fact, the U.S.-based company based in Beaverton, presented sales figures for the past few months, where they show how, in 12 months, they grew only 1 percent compared to the year before.
The slowdown led to a stock market slump of more than twelve percentage points, with the Financial Times calling it one of the company’s worst results since 1999-excluding the pandemic period and the 2009 financial crisis.
Although the reputation of Nike-recognized as perhaps the most influential company in the industry-may leave some people surprised, this is actually nothing new. It is true that the running shoe industry is growing, but Nike, as early as last December, announced cuts of more than $2 billion, laying off several employees.
In addition, the marketing strategy adopted by Nike in recent years has failed: the company, under the leadership of CEO John Donahoe, has focused less on innovation and more on launches of historical and collectible models such as Air Force and Jordan, but also luxury collaborations.
Part of this crisis is also due to Nike’s misreading of developments in the industry. While it is indeed true that the crisis matches the growth of running shoes in the footwear market, it is also true that, after the pandemic, people began to use these shoes, effectively, to run. And Nike found itself lagging behind the technologies adopted by other companies.
Un esempio di modello di New Balance definito “chunky”
Interest in more comfortable and functional shoes has especially rewarded those companies able to invest in techniques and models different from the past, while also sacrificing the beauty and aesthetics of the footwear. The so-called chunky, “stubby” sneakers often referred to as “daddy shoes,” have increasingly gained market share, to the tune of “ugly but comfortable.”
This fashion, which has lasted for several years now, has made the fortunes of several companies that until recently were floundering, crushed by large multinationals such as, precisely, Nike. This is the case, for example, with New Balance, probably the brand that has managed to position itself best. But Asics and Reebok have also relaunched their image.
Indeed, brands such as Adidas, On, and Hoka have invested heavily in new models and technologies, achieving remarkable results. The stock value of On and Hoka’s owner company, Deckers Brand, has risen 44 percent and 103 percent, respectively, in the past year. Nike’s value, on the other hand, has dropped by 17%.
Nike’s decline has also come about due to its decision to pull its apparel from the shelves of many third-party retailers-except for select chains, such as Foot Locker-preferring to focus sales through its own stores and digital channels. On balance, however, the disappearance from stores has encouraged the growth of competition.
I “muri” di scarpe dedicati alla Nike si vedono sempre meno nei negozi di abbigliamento sportivo
In response to the crisis, Nike is attempting to course-correct. It has reduced the production of historical models such as the Air Force, focusing on more innovative solutions. One example is the launch of the new Pegasus model planned for 2025, on the occasion of the Olympics, whose premium band will have a particularly elastic sole and a composition of air and foam of the latest generation.
Another key element of the relaunch strategy is the renewal of the collaboration with rapper Travis Scott, continuing a journey that has lasted seven years so far and has led to the creation of iconic sneakers. Since 2017, when the rapper launched the Cactus Jordan, each model has become a bestseller, with some shoes becoming cult objects.
But the one with Travis Scott is not the only strategic partnership: in fact, the company presented a line of shoes designed with artificial intelligence together with international athletes, such as French national team soccer player Kylian Mbappé.
The changes, however, also affect management. Last week saw the return to Nike of Tom Peddie, a longtime executive who retired and will now have to deal with restructuring the brand’s distribution to return to store shelves. On the sales side, however, it is done for the hiring of Tim Hamilton, a former North Face executive who is now vice president of Nike’s menswear department.
The article It used to be all Nike here comes from TheNewyorker.
