Thursday 16 April 2009

The Nike challenge

Nike shares fell last month after reports the company is seeing a fall in demand. Mary-Ellen Field, experienced IP analyst and friend from Brand Finance, explains why the brand has performed so poorly in Europe, mainly in the UK. She compares Nike to its competitors and breaks down its brands and profitability.

I find this clip very interesting especially having worked with the Dunlop and Slazenger sports brands for the past decade in various guises. Both Dunlop and Slazenger are over a century old and have endured financial crises, mismanagement and times of absolute dominance along the way. It is incredible how flexible, useful, sensitive and durable brands can be. Nike, a relative newcomer to the sports mix, appears to be in phase of uncertainty which will test those in charge for when demand falls, so do the large budgets that help to sustain its success. In many ways Just Do It becomes much tougher, and Just Do It Right so much more important. Great discussion, thanks Mary Ellen and CNBC.


Tom Blackett said...

I didn't hear Mary-Ellen Field's CNBC interview about Nike, but
enjoyed this piece. Nike management trots out the usual excuses about sales of its main brand being hit by the strengthening dollar, cautious inventory management and the general enonomic downturn, but
isn't the truth that the 'Nike' brand has lost its lustre? Its sheer ubiquity doesn't help - and nor does the fact that two of its leading standard bearers, Tiger Woods and Lewis Hamilton, are not performing at their very best.

The 'YSL' brand was pimped by its management in return for lucrative
licence fees; it reached its nadir when it started appearing on Japanese "toilet slippers". The same fate might await Nike - unless
the company rethinks its strategy and starts to inject fresh excitement and aspiration into the brand.

J.H. - Director of Merchandise said...

I can only speak to the U.S. market, but with the explosion here of the Under Armour brand, Nike's popularity has wained considerably amongst our consumers in order to keep up with the hottest trends. The noticeable difference between both brands is that with Under Armour successfully campaigning the concept of their moisture-wicking properties all sizes, shapes and ages here are buying into it. You don't have to be an athlete to appreciate the effects of their (UA) garments with the added bonus of being seen in the hottest brand today.