It May Take a While for Nike to Catch Its Second Wind
If you were trying to dream up in advance how Nike's (NYSE: NKE) multiyear deal as exclusive provider of game apparel to the NBA might launch with an inauspicious gaffe, it would be hard to top what actually happened last week, during the season opener between the Boston Celtics and the Cleveland Cavaliers. On a rather routine defensive clutch by the Boston Celtics' Jaylen Brown, the back of superstar LeBron James' jersey ripped straight down the middle. James is of course, one of Nike's very biggest endorsers, with a lifetime contract said to be worth over $1 billion.
The incident surely spooked those Nike investors with a superstitious bent, following so closely behind news that the company had initiated an uncharacteristically deep flash sale of up to 40% on footwear products in order to work down its inventory. While it's still the dominant sneaker and sports-apparel company across the globe, a recent Piper Jaffray survey shows that Nike is losing some market share -- and mindshare with teens -- to rival Adidas, as well as to streetwear brands like VF Corp.'s Vans label. This slight bit of brand slippage is reflected in the company's most recent quarterly report, which revealed a sales decrease of 3% to $3.9 billion in North America, the company's largest market.
The Nike Zoom LeBron Soldier 11. Image source: Nike Inc.
Source: Fool.com
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