bonyadi magazine
Adidas is Sambaing all over Nike’s high tops
Nike Inc. on Thursday lowered its sales outlook for the current fiscal year, blaming a slump in demand for its top-selling sneakers, such as the Air Force 1 and Air Jordan 1. It’s no coincidence that these styles have fallen out of favor with fashionistas, who are instead choosing Adidas AG’s low-rise models, led by the Samba
This sartorial shift looks like it is really starting to hurt Nike. It’s unusual for the market leader to be so on the back foot
Nike Chief Executive Officer John Donahoe is trying to spark a revival with a suite of new products. But these are primarily focused on performance: Helping runners run faster, footballers kick harder and yoga enthusiasts stretch more comfortably. Nike and Adidas are also fashion brands; their most successful periods come when their products are riding a wave of popularity
Until last year, Nike’s chunky styles, including the Dunk produced in near-infinite colorways, were ubiquitous. Now, Adidas’ sleeker models, also including the Handball Spezial, SL 72 and Gazelle, adorn the feet of fitsters
As well as improving Nike’s performance offering — where it’s also under pressure from rivals including Swiss upstart On Holding AG — Donahoe needs to find some new hits in the more fashion-oriented lifestyle category if he is to wrestle back momentum from Adidas
Underlining the reversal in the two companies’ fortunes, Nike said that after enjoying double-digit growth over the past few years, sales in its lifestyle business fell across men’s and women’s products and its Jordan brand in the three months to May 31. This dragged down its online sales, which declined 10% in the quarter. The weak demand for its previous high-fliers has continued in April, May and June, a period for which Adidas is expected to report solid growth
Nike wants to pull back on its best sellers — one of the reasons why it expects revenue to fall by a mid-single digit percentage in the year to May 2025 — to make room for new models. But this now has more urgency
While Adidas is leading the low-rise retro trend, Nike isn’t being totally left behind. Donahoe recognizes the need to revitalize the more style oriented selection; Nike’s Cortez sneaker is gaining traction, with the company recently reissuing several models such as an all-white leather version favored by The Bear star Jeremy Allen White, and the red, white and blue Forrest Gump model
Meanwhile, the Killshot and the Field General are selling well, and Nike plans to ramp them up. It aims to almost triple its retro running business by the end of this fiscal year, compared with the start of fiscal 2024
This demonstrates that Nike can still be agile, but it needs to go further. Its product archives, which Donahoe described as a unique asset, offer opportunities. He also recognizes that the company needs to be faster to market, accelerating the design and production process to help it respond more quickly to changing consumer tastes
And while there are green shoots elsewhere, including enthusiasm around the futuristic new iteration of the Air Max sneaker, developing new hit products won’t be instantaneous. It could take a year or so to bring in best-sellers like the Air Force 1
Meanwhile, Adidas CEO Bjorn Gulden shows no sign of letting up. The product-obsessed former professional footballer is already trying to anticipate what will follow the Samba, and delaying some launches to prevent the market over-heating. He’s trying to make the clothes that athletes wear more fashionable, and the summer of sport is a perfect platform to showcase these
It’s little wonder that Nike shares, down 15% in premarket trading, have underperformed Adidas this year
Still, fashion is notoriously fickle. The Nike Dunk blew up quickly five years ago. Adidas’ Yeezy collaboration with Kanye West imploded after the musician known as Ye’s antisemitic comments in 2022
For Nike to get back in the game, it needs not only to perform well on the field, but to look good doing it
