JORDAN BRAND STRUGGLES TO ADJUST AS FASHION TRENDS CHANGE
Nike’s (NKE) iconic Jordan Brand, which at one time instantly sold out weekly releases, has unexpectedly struggled over the last several quarters. As fashion has trended away from high-end basketball sneakers and towards low-tops that best fit with skinny jeans and joggers, the Jumpman Brand has struggled to adjust. Nike’s solution has been to increase the volume of Jordan sneaker releases; but with most pairs lacking high demand, many fail to sell out immediately, raising the possibility of long-term brand erosion.
Howie Long-Short: In January 2015, Jordan Brand made up 96% of the sneaker resale market. Adidas (ADDYY) had 1%. Adidas now has 45%. Considering the sneaker resale market is estimated to be valued at $1.2 billion, that’s a lot of Adidas shoes being bought (and resold) in place of Jordan’s.
Fan Marino: Morgan Stanley says that “Nike has lost its core sneaker enthusiast customer to Adidas.” As a sneaker head, I say that is a gross exaggeration. I recently bought a pair of Adidas EQT Support ADV. They are already on their way back to Adidas. They were a pain to put on, the wife hated the way they looked and I didn’t find them to be particularly comfortable.