The tone seems to be changing for Nike.
When I began writing Insider Ties, a lot of the reasons for doing so was because I couldn’t find anyone discussing the actual business aspects of the industry. The stock analysts where looking at it purely from an investment angle, and the news industry sites were looking at each quarter. What neither of the industries had was an insider’s point of view that actually sells the shoes and deals with the shoes on a daily basis outside of the traditional channels.
That’s where I come in. I’m not an account holder. I’m not trading stock on any of the brands. I’m able to look at it purely as a person who sells footwear on the largest e-commerce platform. Doing this gives me a direct line on what brand is likely to continue growing and which brand will miss in the short term out to 6 months. When I saw this report, it generally follows the trend of saying “Nike is experiencing its first slow down and missing targets.” What those reports lack is an understanding of what is really happening.
Nike’s lackluster reviews are obviously due to the diversifying buying habits of the public. People are heavy into adidas and Under Armour has made a small crack, and isn’t a crack all that is needed to topple the kingdom?
Not exactly. In order for brands to continue forcing Nike to play a better hand they can’t make any mistakes. Quite frankly I see both Adidas and Under Armour making serious mistakes. These mistakes will allow Nike to reestablish its dominance and could see both UA and adidas fail to reach the targets I’ve said are possible. (I’ve said UA could hit 48 this holiday season, but I’m wrong) (I’ve said adidas is going to really push Nike, but I’m backtracking.) Here is why without going into great detail.
- Under Armour’s UAS has some of the best casual athletic attire on the market. Unfortunately they don’t have a distribution outlet for this damn good line. They have ramped up Facebook ads and marketing through traditional channels when they should really take more time to do a more grassroots approach to the line.
- UA is not doing anything exciting for the Steph Curry line. The Curry Lux was and is not living up to its potential. Instead of laying down the gauntlet and running a series for Steph this summer, KD has taken the spotlight away from UA by joining the Warriors. The failure to double down on Curry and not using him in the UAS brand to avoid cross promotion is a fail.
- Canelo Alvarez is marketable. Canelo Alvarez is marketable. The Rock should not be an individual line. He should be a Curry Brand Athlete and Curry’s influence should transition into cross training ala Jordan Brand making running shoes.
- Adidas is making too many fucking NMDs. The NMD was the poor man’s Yeezy and remains that way for right now. Yeezy is adidas’ main reason for growth. I don’t care how they cut it. One guy dominating your growth is dangerous. Pharrell is Kanye lite and the NMD is only selling because of Kanye. But this is what I’ve seen first hand. A little deviation: last year the Huarache dropped and became the hottest shoe for Nike. It was retro, lightweight and funky looking. When it dropped it was reselling for 200 per pair. The shoe cost 100. Nike then increased the price to 110 to 130 for Premium models. They constantly restocked and released a thousand colorways. You can now find certain Huaraches below retail and the shoe no longer has the buyer cache. Adidas does not have the brand clout to do this, but what are they doing? The same thing. The NMD was reselling at 200-250 for certain models. Adidas was doing a good job of producing just enough. Now there are an abundance of colorways and the resell value is decreasing and NMDs can be found sitting on shelves.
I could delve deeper but this is long already. Let me know what you think and I will definitely come back to this again. Click through on the source link to read about Nike’s stumble.