It's
been a difficult few years for Nike.
The largest sportswear brand on the planet, named after the ancient Greek
goddess of victory, has been losing of late. Losing sales, losing customers and
losing ground to its rivals. The one-time industry disruptor is now the
establishment and in the middle of a tricky turnaround plan aimed at
clinging on to market dominance. Nike's latest financial results show signs a
turnaround strategy is working however, its recovery has been dented by
the loss of football star Kylian Mbappé, who ended his 20-year association with
the brand last week to join fast-growing Swiss rival, On. To be clear, Nike is
still a mega brand and popular the world over. But missteps have seen hundreds
of billions of dollars wiped off its stock market value as its share price
tumbled by 75% over five years. Matt Powell, a veteran analyst and adviser in
the sports retail industry, reckons Nike has made "several strategic
errors" which have been difficult to reverse, including cutting ties with
retailers to sell only direct to customers online and making limited editions
items more available. Other self-inflicted wounds he suggests include spending
research and development cash on digital operations rather than new products. As
demand weakened overseas in key markets like China, Nike announced cost cuts
and redundancies. Its digital distraction allowed newer footwear firms on top
of the trends to snap at its heels. Shop shelf space previously occupied by
Nike was replaced by brands such as On and Hoka. This was a stark warning to a
company that prided and built itself on innovation.
BBQ - Do you think Nike has lost market power?
