Sneakernomics: Nike’s surprise?
I find it amusing that the business press is calling Nike’s quarterly results a surprise.
The poor results and weak guidance are a direct result of the obvious management failures we’ve been highlighting for some time.
During the pandemic, Nike stuffed the market with Jordan 1, Air Force 1 and Dunks. All of these programs are now on life support and may not ever recover. Last quarter Nike said they would pull back on these programs to try to save them. But natively, management did not understand that pulling back would mean the brand would do a lot less business. It will take a long time for these franchises to recover (if they ever can).
Nike also shut down the innovation pipeline during the pandemic. Lack of new and fresh products have also slowed recovery. Ramping up new products is again the correct thing to do. But again, it will take time. No quick fix here.
Nike’s decision to pull back from mid-market was not well thought out and poorly executed. As the brand reverses course here, sales will improve, but this will not happen overnight.
China remains a major issue for all Western brands and will not be solved by a few limited-edition styles.
Finally, in an attempt to force their DTC goals, Nike DTC was extremely promotional over the last few years. With no compelling new products, Nike DTC will have to continue to be on sale 24/7. It will take years for the brand to return to full price selling, and maybe will never be able to achieve full price selling again.
All of Nike’s woes are self-inflicted, absolutely preventable and will take years to fix it at all.
Where’s the surprise?
Life Manager
5moMatt Powell “Last quarter Nike said they would pull back on these programs to try to save them. But natively, management did not understand that pulling back would mean the brand would do a lot less business. “. Your kidding right Matt Powell. Are these the same dopes that thought closing major accounts would work? Those of us that lived the life know that if you have two accounts in proximity and one closes you do not gain enough volume to offset that loss. Jeez (26 years Nike, first apparel only rep). This makes me so sick. So many good people gave so much of their lives to build this brand.
South Europe Marketing Director @Versuni | Ex-Christian Dior Couture, Ex-Nike Building brand experiences and storytelling. Consumer first, digitally led and omnichannel focus
5mosuch a fame. such a failure. No suprise at all. everyone in the industry is seeing this. and consumers are not blind too.
Research | Innovation
5moHear, hear!
All things denim, heritage, streetwear, surf & outdoor related. Clothing/footwear history & heritage wear. Open to consult if asked nicely. 😎.
6moGreat piece as always. It is only surprising if you don’t know anything about retail. Increasingly brand owners and company executives don’t.
U.S President | Culture Kings
6moahh. The forever fine balance of sales/rev growth and brand impact (ideally growth at the sometime). Nike will be fine - but will be a long and hard run up that mountain.