Drumil Modi, Pune
Over the years it has gotten easier and easier to score a pair of limited-edition Jordan sneakers, and this has not become a problem for Nike, as evident in the company’s latest financial results.
Nike’s revenue has gone down by 10% and its profits fell by a whopping 28% from a year ago. As per internal reports, the sales could fall another 10% in the current quarter. The company’s new CEO will be starting his term later this month, until which Nike has decided to provide a forecast for the fiscal year ending in May.
In 2023, Nike Chief Executive John Donahoe celebrated Air Force 1, Air Jordan 1 and Dunk as the three biggest footwear franchises in the industry. The sales for these models were strong which resulted in $51 billion in annual sales.
Nike oversold them and it resulted in the devaluation of the entire shoe lineup. The company is now going to reduce the supply of its flagship lineup of shoes. But only time will tell if these shoes will ever regain their value.
At its peak, Nike was running out of stock in seconds. People were using resale platforms such as StockX and GOAT to sell their shoes for profit. The company at the moment is selling their shoes at a discounted price, once the stock is over Nike is expected to bring out truly limited editions, in hopes of bringing back the charm Nike once had.
Nike released 700 different Jordan brand sneakers in 2023, more than it has ever released in a single year. As per the date, the company is planning to reduce this by 35% this year. Nike is also struggling to sell shoes on its SNKRS app, only 20% of the sales account of the Nike app and website.
The shoe landscape has rapidly changed in the last few years brands are competing in both running and lifestyle categories. People of all ages are shifting from Jordan and Air Force to Addias Simba, New Balance 990 and Asics Gel-Kayano. As per the analysis, Nike no longer has a groundbreaking product like they did in 2017.
The shoe market is ever-changing and with the introduction of the new CEO, Nike might turn this around and get back on top.