Nike’s North American sales are down 5% YOY
Virgil Abloh is now part of Nike’s core brand sneaker strategy
Nike’s (NKE -0.97%) Jordan Brand recently released the latest shoe in its “The Ten” collaboration with Virgil Abloh’s Off-White brand. The build up to the release had sneakerheads in a tizzy, and the shoe quickly sold out in Europe. Is this partnership going to help reinvigorate the Nike brand?
Why This Matters: Consumer tastes are rapidly changing and favor more casual designs in white colorways. This is a problem for Nike because the star athletes its used to drive consumer tastes typically wear more colorful styles. North America, Nike’s largest territory has been particularly challenging. The region has seen a 5% drop year-over-year.
In response to this new environment, Nike is partnering with Virgil Abloh as he’s arguably the hottest fashion designer at the moment. The company is trying to build up demand for the Nike brand through this partnership. The bet appears to be paying off. “When we create distinction for our brand and show up authentically, the consumer responds,” said Nike President Trevor Edwards.
Situational Awareness: Last week we reported on the importance of brands having an authentic presence in order to appeal to black consumers. Nike’s incorporating Virgil Abloh in its core strategy is a strong example of brands responding to that reality.
Keep an eye out for Nike’s Q3 earnings on March 22 to see if the results of the collaboration with Virgil Abloh along with other components of its partnership strategy show up in its financial statements.
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