Nike as a brand is dying horribly...
Just in the past one year, its stock has fallen by 32%...
Just the day Nike’s last quarter results came out, its value fell by USD 25 Bn...
And there are broadly 3 reasons for its fall.
👉🏼 Firstly, they decided to remove categories like Basketball, Football, Running and Training from their footwear. Instead, they just divided it all into Men, Women and Kids... quite like the fast fashion brands such as Zara and H&M...
In the process, killing the communication that it stood for athletes and their specialised skills.
👉🏼 About 4 years ago, the new CEO of the company, John Donahue, decided that Nike was going to become a D2C company, reducing its offline stores and hitting the pedal on online direct sales from its website.
So they started killing their agreements with hundreds of wholesalers around the world.
When brands like On Cloud and Hoka were building offline relationships, Nike was pulling out majorly from the offline distribution channel.
This led to consumers who would go to buy shoes offline finding other brands, and Nike found that they didn’t really have the pull or the loyalty that they thought they would, by hoping people would shift to buying from their website.
👉🏼 It started shifting focus from Brand Marketing like sponsoring sporting events to just running performance marketing ads targeted to make a sale...
In the process, killing the creativity to optimizing ads to look like everything that they thought would sell.
Thus, leading to massive brand value dilution.
The company has destroyed over 30% of its value in the past one year, and is down by 9% of the value it had 5 years ago...
Despite all the buzz you saw about the Nike Jordans in this period.
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Please read a wonderful piece done by Massimo Giunco called Nike: An Epic Saga of Value Destruction for more.
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23
@sushmitapandey7615
1 month ago
The quality is also degrading and getting unnecessarily expensive so why will I buy Nike.
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