Nike could be losing ground as the athletic market leader.
While browsing Footwear News this article rolled across and I had to write a few quick words. FN lists three reasons why Nike is hurting. In short they are:
- North America
- Inventory and Slumping Sig Sales
While the evidence is clear, once again FN and other outlets are running with this idea of Nike’s demise based on a weak Olympic season and a decrease in future orders. I’ve been saying one thing this entire time and if anyone is paying attention to these articles you know what’s coming… DTC. Nike is pushing to cut out as many middle men as possible. What is the natural outcome? A decrease in Futures. If I Frank Lucas is able to get Blue Magic directly into the hands of the zombies, then what is happening to the profit margin for the company? I explained this in this video:
Click to YouTube to see the interview breakdown to get to my discussion on DTC.
While the door is opening for other brands, Nike’s “seeming” losses aren’t really losses at this point. The company has found a way to decrease the wholesale market and increase their retail footprint and doing so means that they can take more risks in pricing and product. It also means that their recent adjustment due to the crappy sales of the Lebron 13 and KD 8 have been offset already by a reduction in price and a better design on the KD9 and a championship for LeBron with a cheaper model as the focus in the Solder X.
We have to keep an eye on this though and I expect questions.