The Fading Swoosh

Nike, named after the Greek goddess of victory, it would be an understatement to say that the sports conglomerate has lived up to its name. It owns over 35% of the total shoe market and that figure has been steadily increasing year by year. The craze behind Nike labels like Jordan, Mercurials and Pegasus has become palpable, with some shoes selling out minutes after release. Despite this, Nike sales have been falling since 2024 while competitors like Adidas show no signs of slowing down.

The switch of CEO from Mark Parker to John Donahoe, who had more experience working with tech companies, rather than sportswear companies, in 2020 brought with it a new mindset, to shift the focus of Nike to a Direct to Consumer model. At first, this was a nice idea, with the newly-launched (at the time) SNKRS app doubling its user base and running nearly 20% of Nike’s online business. When lockdown struck, this strategy became even better for the company, making it less reliant on physical outlets. John Donahoe even stated that “The consumer is too comfortable with the digital space and simply will not revert back(to physical outlets).” Hence, once the pandemic was over, Nike, in a very aggressive move, cut ties with many retailers like Foot Locker, and competitors slowly started taking over Nike’s spots in stores. Though Nike realised its mistakes when sales started dropping and rekindled its relationship with outlet stores, it just wasn’t the same as before.

Hence, as consumers started seeing less Nike in the outlet stores, the demand for Nike products started weakening. Before this point, Nike had made many of its sneakers, especially the Jordans limited edition, where only about 7% of the total demand of these shoes was being met. Soon, in order to promote sales, this figure went up to 70% and the exclusivity was gone, the magic was gone. This was the time you would see panda dunks on every second guy’s feet on the street. In 2023, Nike stock dropped by almost 17%, which is their largest drop in the last 20 years.

Years ago, Adidas lost a young Micheal Jordan, who was adamant on signing with Adidas, to Nike. He went on to create probably the most recognisable signature sport shoe ever. When their turn came with Kobe Bryant, they did sign him, but blew it when Kobe did not like the Kobe 2s, paying 8 million dollars out of his own pocket to end his partnership with Adidas, but this seems to be changing. Many notable names, Damian Lillard, Trae Young and James Harden have signed with Adidas over the years and have created some really great shoes. However, November 2023 marked something very special, the release of the AE1s, in collaboration with the rising star, Anthony Edwards, who is said to be the future face of the NBA. Adding to the theme, they have also signed the ‘Golden Boy of Barcelona’, Lamine Yamal. These business deals have put Adidas on the map for 2 of the most watched sports all over the world for years to come.

The basketball world has received these shoes with open arms, proclaiming the AE1s as one of the best debut signature shoes since the Jordan 1s back in 1985. After all, marketing is about storytelling, a space Nike has dominated since the Jordan era, showcasing its shoes and other products through the stories of sporting superstars, be it Roger Federer, Cristiano Ronaldo, or Micheal Jordan, they have sold motivation to their consumers.

Recently, Elliot Hill has taken over as CEO from John Donahoe, who notably started as an intern at Nike, and has worked his way up to CEO through the sales channel, showing that he knows the company and the lore behind it inside out. The biggest challenge in front of him is innovation, something that has been lacking since Phil Knight, the co-founder, stepped down as Chairman in 2016. With this, success has followed. This year, Nike stock has shown signs of improvement, being green throughout the last 2 months. Hill’s latest statements say that he wishes to clear out excess inventory and focus funds towards sports marketing, something Nike’s roots as a company point towards. In his speech to the company employees, he remarked “We lost our obsession with sports. Moving forward, we will lead with sport and put the athlete as the centre of every decision.” There is no easy way to say this, but Nike is not the untouchable sportswear giant it once was, and the only way for it to claw its way back is how it got there in the first place, with innovation and with the athlete at the forefront.