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 1st Oct 2020: "Camp Next Level". With most traditional fixtures curtailed by Covid, Nike too is turning its attention to sports you can play from home. China hosts the company's first big push into eSports, accompanied by a hyperactive, CG-enhanced campaign from Wieden & Kennedy Shanghai. It's still doesn't quite make sense that playing video games can constitute a real sport - what part of your body gets any exercise from it apart from your thumbs? - but plenty of marketers seem to think so. And if that's where the money is, it seems more than likely that gaming could even turn up at the Olympics one day soon. Wieden Shanghai gives us a taste of what that training camp might feel like.
Adbrands Daily Update 31st Jul 2020: "You Can't Stop Us". Wieden & Kennedy's latest for Nike is an absolute miracle of top-of-its-game editing, stitching together a succession of great sporting moments both professional and amateur with exceptional skill and precision. Apparently, director Oscar Hudson, and editors Peter Wiedensmith and Jessica Baclesse, working with visual effects studio A52, researched 4,000 sports action sequences and chose 72 of them to combine into 36 split-screen moments. Virtually all of Nike's top endorsement stars take a brief turn in the sun: Serena Williams, Colin Kaepernick, Megan Rapinoe, LeBron James, Naomi Osaka, Eliud Kipchoge, Caster Semenya, Cristiano Ronaldo, Giannis Antetokounmpo and Kylian Mbappé among others, along with several unnamed everyday amateurs. Frankly, the script is something else. Call me a cynical Brit, but this sort of inspirational messaging - voiced here by Rapinoe - leaves me a little cold. The visuals, though, are enough to take your breath away.
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.
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