Nike: Just Not Doing It for Me

I’m getting worried about Nike.

A little holiday shopping led to this observation: There’s too much Nike (NKE) at Nordstrom’s (JWN) (hey I don’t spend all my time at Walmart).

While Julie tried on shoes it occurred to me that Nike is proving that it is possible to over-emphasize the new. They are competing as a fashion brand, and letting that agenda cloud their core message. C’mon, what do frilly purple boots and UGG knock-offs have to do with “Just Do It”?

Fashion is Nike’s differentiator in a field of athletic wear, but function has always come first. The function is the promise. Once upon a time a waffle-iron inspired a brilliant innovation: a better tread for better performance. A brand was born. It was a beacon. But when fashion eclipses function, the message just gets foggy, and a recession will punish foggy brands.

Do they have the DNA to become a fashion house? Can they build it or buy it? If not, they should throw out the fuzzy boots and get back to making moves that fit the focus of the brand (like this idea).

Nike means victory – on the athletic field, not the runway.

Full disclosure: Julie bought the UGGs.

Disclosure: no positions.

Comments

[oldshoedog:]

Wow DUDE!

Awesome intel!

JWN (which has to represent at least one tenth of one percent of NKE's sales has a couple of funky NKE shoes and NKE is taking the wrong direction?

what deep insight into NKE's product development and planning! Have you ever actually talked to anyone who works for NKE? Or do you just spend all your time carrying Julie's bags?

You must be rich!

(and by the way, the frilly purple ones look nice on you.)

2008 Dec 24 08:46 AM

[shoedgo:]

David,
Sport is American culture and fashion. Based on your analysis, all the people that are wearing Under Armour should be in the gym and not walking the malls, etc. Reminds me of lycra in the 1980's.
NKE is far and away the most focused brand/company with the ability to execute - take a look at the numbers relative to the competition. CEO of Nike said it best, “We continue to grow because we’re innovative, disciplined and connected to our consumers.”

2008 Dec 24 12:43 PM

[TA:]

Not doing it for me either

Looked at it many times in the past, dividend is too small to buy my patience and it's not a growth stock either. A lot like PG, just can't find a reason to hold it.

2008 Dec 24 02:26 PM

[Harry Lacheen:]

I think it is fine for Nike to explore new demographics.

They stay focused on their core concepts with certain products, and it works well (still gaining market share). Expanding into frilly boots won't take away from its other products.

2008 Dec 30 03:26 AM