Nike is the world's #1 manufacturer and marketer of athletic footwear and apparel. Almost out of the blue, the company established itself during the 1980s and 1990s as one of the world's most familiar brands; as ubiquitous as a Coke bottle or Big Mac. The Nike "swoosh" logo came to symbolize not just sports culture, but street culture, as the appeal of the star players who endorsed the brand was carried onto city streets. The approach of the new century set Nike new problems. Trainers went (briefly) out of fashion, economic slowdown and labour problems hit Asian performance. But the group has bounced back strongly, retaining and gradually strengthening its iron grip on the global sporting footwear sector and on US sports-related apparel in particular. Sports culture remains an intrinsic part of modern daily life, and Nike has tightened its hold on the market as a whole through endorsement partnerships with many of the world's most prominent sports men and women. It spends more than $1.3bn a year to maintain its partnerships with individual athletes, clubs and national sporting organisations. Key partners include basketball stars LeBron James, Chris Paul, Kevin Durant and Kyrie Irving, tennis player Rafael Nadal, golfers Tiger Woods and Rory McIlroy, NFL stars Russell Wilson and Odell Backham Jr, soccer players Cristiano Ronaldo, Neymar Jr and clubs including FC Barcelona, Paris St Germain and Chelsea. A key development has been its erosion of arch-rival Adidas's grip on the global soccer market. Nike's performance in the year to May 2020 was dented by the global Coronavirus pandemic, with revenues falling to $37.4bn, while net income slumped by more than a third to $2.5bn. A small collection of secondary brands accumulated in the 1990s - Bauer ice hockey, Cole Haan footwear - has been gradually divested, but the group still owns Converse sports shoes and the Hurley action sports brand. The core Nike brand accounted for sales of $35.6bn in ye 2020, with Converse contributing $1.8bn, and footwear accounted for almost two-thirds of sales. Key sporting segments include basketball (including the Jordan sub-brand), running, training and soccer. Men's footwear and apparel accounted for more than half of sales. Nike's long-serving CEO Mark Parker moved up to chairman at the end of 2019. He was succeeded as CEO by John Donahoe.
Capsule checked 26th June 2020
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Who are the competitors of Nike? Nike's main competitors are Adidas (also owner of Reebok) and Puma. Others include Under Armour, Li Ning, Asics, Fila, K-Swiss and New BalanceSee Fashion & Apparel Sector for other companies
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Historical profile information for Nike
Adbrands Daily Update 26th June 2020: Nike suffered a comparatively modest full year impact on sales from the Cornonavirus pandemic which exerted its full effect in the final quarter. A 7% gain in revenues for the first nine months of the year turned into a 4% decline to $37.4bn. However, net income suffered a 37% hit (compared to a 4% gain for the first nine months) because of a 38% fall in 4Q revenues as well as higher costs from factory cancellation charges, increased inventory obsolescence reserves and other expenses relating to the closure of global retail outlets. These resulted in a rare (for Nike) net loss in the final quarter, and full year net income of $2.5bn.
Adbrands Daily Update 16th Mar 2020: Apple was the first major retailer to announce the closure of its global retail network in the face of spreading Coronovirus. All its hundreds of stores outside China will close for at least two weeks. (At the same time, the stores in China, which had already been closed, reopened in response to the slowing spread of infection in that country). Apple's announcement prompted many other retailers to follow suit. Abercrombie & Fitch, Nike, Under Armour and Urban Outfitters were among the companies to close their stores in the US. Most are also closing international outlets in Europe and Oceania. Starbucks said it would close some US stores, reduce opening hours at others, and restrict thousands more to take-out service only.
Adbrands Daily Update 11th Dec 2019: "Qiang Diao". Wieden & Kennedy Shanghai's splendid new film for Nike China plays a little like a sports-themed version of Guy Ritchie's 'Snatch' movie. "Qiang Diao" is a Mandarin word that means "swagger" or "confidence", and it's something you have to earn; not a quality you can just buy. So this Chinese gazillionaire is going to be disappointed when he sends off his minion to get him some. Needless to say, Nike's message is that the best way to earn yourself some qiang diao of your own is through sports. The extended ad is lots of fun.
Adbrands Daily Update 23rd Oct 2019: Nike's CEO Mark Parker announced plans to relinquish that role at the end of the year. He will move to executive chairman, and be succeeded as CEO by John Donahoe, the former CEO of eBay and current chairman of Paypal, who is already a board director at Nike. His appointment suggests an even more aggressive push by Nike into direct-to-consumer retail. A 40-year veteran of Nike, who joined the company straight out of college, Parker has overseen a dramatic expansion of the business since he took on the top job in 2006. Sales have more than doubled, and Nike's share price is currently trading around record levels.
Adbrands Daily Update 28th Jun 2019: Nike posted strong performance for its 4Q and the full year to May, underpinned by solid growth in both the USA and China. There was no impact so far, said the company, from the trade war between those two countries. Another key contributor was direct to consumer sales via the Nike website and app, which rose 35% year-on-year. Full year topline rose 7% to a new high of $39.1bn, including $37.2bn from the Nike brand. Converse was flat at $1.9bn. Sales from China jumped 21% to $6.2bn, but North America remains the company's bedrock, up 7% to $15.9bn. Footwear accounts for around a third of Nike brand revenues, and apparel for most of the rest. Almost all the brand's sport segments reported growth, with soccer the notable exception, down 6% organic. Group net income more than doubled year-on-year, after last year's one-off tax hit, topping $4.0bn.
Adbrands Daily Update 20th Jun 2019: Only three days in, and Nike collected its fourth grand Prix of the 2019 Cannes Lions with a clever Media campaign in Brazil, coordinated by AKQA and Wieden & Kennedy. AKQA got local graffiti artists to spraypaint an exclusive custom-designed pair of Nike Air Max trainers onto their work in different areas of Sao Paulo. Nike then told customers they could order the limited edition shoes via their app, but only from the location of the graffiti. A GPS signal from their smartphones confirmed their positions and opened a special ordering page in the app.
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