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The Last Days of Relevance: Nike
What's happened since the last time we checked in on Nike?
Ahmed Saeed
September 15, 2024
In partnership with
So we wrote a huge thing on Nike a couple of months ago.
And we told ourselves to come back to it after the Olympics, since the company was pushing a brand resurgence this summer. So, let’s see how they did.
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Nike: Where did we leave off?
The company’s stock is in a freefall for the last 5ish years. This is due to brand staleness and lower sales due to a tightening distribution strategy in order to boost direct sales.
The company has been slow to react, touting its innovation around sneaker ideation-to-production pipelines instead.
D2C sales are below company’s expectations, billion dollar internal initiatives haven’t even gotten off the ground yet, and the company just feels like its out of ideas.
How did Nike do with the Olympics?
Long story short, not bad.
From Reuters:
The visits [to Nike.com] peaked on July 31 to 2 million, following U.S. gymnast Simone Biles clinching her seventh Olympic gold medal after the United States earned their third gold in the women's team event.
Out of those visits to Nike.com, 86,900 included a sale, while Adidas had a total of 532,500 visits with only 3,600 likely converted into product purchases, the data showed.
Hoka, did however, eat both Nike and Adidas’ lunch when itch to sales conversions. Given that there was so much push at Nike towards D2C coming out of the pandemic, this visual is…kind of embarassing.
This signals plenty of opportunity for Nike to improve conversions across native channels DESPITE HAVING HISTORIC LEVELS OF EXPOSURE WITH THEIR ATHLETES.
Source: Reuters
Does this mean the brand is turning around?
Plain and simple: No.
You have a CEO who’s been running this company for 4+ years with mixed/negative results. If there was ever a moment to set shareholder expectations and lay out a plan for turning around the company, it’s now.
If Nike was absolutely serious about this, they would start this process now, but with a new CEO.
The stock has been in a free fall for 4+ years, and an incumbent CEO raised outside of the confines of Nike who’s been at the helm during most of this historic decline isn’t all of a sudden going to be hit with inspiration to abandon current initiatives and double down on the things that brought it so much success in the first place.
Consider the olympics a nice ‘market dynamics cover up individual performance’ moment.
None of this is investment advice, btw.
Have a great week!
Ahmed and Peter
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