Nike Expects To Reach $50 Billion By 2020

Photo Credit: Nike.com
Photo Credit: Nike.com

A few weeks ago, at Nike’s 2015 Investor Day, the company announced its expectation to deliver $50 billion in revenue by 2020.  Nike reached $30.6 billion by the end of FY2015 so they are projecting a 38% increase in revenue over the next five years.  Part of the strategy to achieve the growth includes: expanding the women’s business, growing e-commerce, moving Jordan beyond the basketball category, forging strategic partnerships and increasing global revenue.  The full transcript can be found here.

Nike:

NIKE is built for growth,” said Mark Parker, President and CEO of NIKE, Inc. “We see tremendous growth potential in our key categories and geographies, as we connect with athletes through personal service, inspirational experiences and innovative product. When we look across our entire business, there has never been more opportunity.”

“Today, we’re showing how Nike is built for growth – now and for years to come,” says Parker. “We lead because we serve the athlete and consumer completely – through breakthrough product and personal experiences, all around the world. As we look toward 2020, we are accelerating the pace of innovation across every area of our business to deliver the very best to athletes everywhere – when and where they want it.”

  1. Nike plans to nearly double its women’s business from $5.7 billion to $11 billion. They are primed to capitalize on the “athleisure” trend.   According to USA Today, these plans include rolling out a Flywire sports bra, opening more women only stores, dedicating store space for women’s products and expanding group training opportunities aimed at women.
  1. E-commerce is projected to increase from $1 billion to $7 billion. Over the past 18 months Nike has connected all of its US store, Nike Stores, and Factory Stores to mobile checkout and an in-store digital commerce platform.  This allows consumers to shop online and in-store at the same time, which gives them access to an endless supply of products, any way they want them.  The concept has been launched in the UK and they plan to roll it out worldwide.  Additionally, Nike will continue to lead with mobile and expand nike.com globally.  Canada, Switzerland and Norway are next on the list for nike.com.
  1. Jordan is expected to nearly double to $4.5 billion. According to Bloomberg Business, Nike’s Jordan brand will start making sneakers for women.  There will also be gear for weekend warriors, football fans and runners.  College football fans learned of Jordan’s plans for category expansion this summer when they announced the Michigan wolverines will be the first football team to wear the Jumpman logo.
  1. Nike will partner with DreamWorks and its newly formed technology company, NOVA, to build a 3D digital system that will transform the product creation process. This includes nearly instantaneous digital print applications, photo-real 3D visualizations and ultra-rapid prototyping.  Nike plans to develop a 125,000 square-foot Advanced Product Creation Center that will improve concept-to-creation.  Additionally, Nike will partner with Flex, a $26 billion world class manufacturer with global supply chain expertise.  The partnership will allow Nike to deliver footwear innovation to consumers more quickly, with more customization options.
  1. Global growth will be critical for reaching the lofting revenue goal. Nike is expecting its China revenue to more than double to $6.5 billion.  Despite some economic instability in China, Nike expects its business to grow.  Providing distribution where consumers live, shop and participate in sports as well as focusing on running, basketball, Jordan, sportswear and women’s categories seems to be the winning strategy.

The Rio Olympics in 2016 and Nike’s NBA deal for 2017 should have a significant impact on revenues as well.   It’s no surprise a company that outfits some of the world’s best athletes would aim for such an ambitious goal.  Nike has the visionary leadership, bleeding edge innovation and “it” products to pull it off.  If there is anyone who can “just do it,” it’s Nike.

Denim Is Out and ‘Athleisure’ Is In

(Photo by Jeffrey Mayer/WireImage)
(Photo by Jeffrey Mayer/WireImage)
Photo Credit: nodstrom.com
Photo Credit: nodstrom.com

Business Insider published an article about the decline of denim among female teens in the US in favor of more casual, and comfortable, activewear.  According to the Spring 2015 Piper Jaffray survey on teen spending, “athletic-leisure, preppy, legging and jogging pants are among the top teen fashion trends.”

It’s no surprise.  Industry experts have been aware of the trend for quite some time.  Major retail brands have been responding to the demand by offering leggings, yoga pants and activewear.  For example, Gap acquired  Athleta (a less expensive activewear alternative to Lululemon) in 2008.  BuzzFeed discusses Athleta and the apparel trend here.

BuzzFeed:

The popularity of yoga pants, running tights, and other athletic gear is relatively new in the grand scheme of how American women dress. Lululemon, which was founded in 1998 and greatly helped fuel the trend, only went public in 2007. At that point, the company had 59 stores and close to $150 million in annual sales. Today, its yearly revenue has ballooned to $1.8 billion and it has 302 stores — and that’s despite the fierce, escalating competition from Athleta and other corporate behemoths like Under Armour and Nike, as well as upstarts like Sweaty Betty and Fabletics.

BuzzFeed News
BuzzFeed News

Lululemon’s number of stores and sales have exploded over the last eight years and Athleta has been on the rise for the last five years, while, Bloomberg reports, denim has essentially been in free fall.

Bloomberg:

By the summer of 2014, with sales of athletic pants rising 62 percent from 2010—and athleisure apparel looking less like a fad and more like a permanent addition to women’s closets—retail journalists began writing obituaries for women’s denim.

So who is benefiting from the “athlesiure” trend?  Nike is the preferred provider of athleticwear followed by Under Armour, Lululemon and Adidas.

Regardless of whether consumers are driven by function, fashion, or a combination of the two, it looks like ladies denim is on its way out and athleticwear is here to stay.  This is good news for athletic lifestyle brands but bad news for those in the jean business.  Is denim done-im or can the Levi’s of the world reinvent the wheel and get ladies to jump back into jeans?

Adidas Is All In On James Harden

Photo Credit: Bleacher Report
Photo Credit: Bleacher Report

Nike can’t offer everyone their own signature shoe and a massive pay out, so that leaves the door open for competitors like Adidas and Under Armour to entice athletes to jump ship.  This summer, Adidas  did just that when they lured James Harden from Nike with a massive 13 year deal that officially began on October 1st.  It would be difficult for anyone to say no to $200 million and a shoe/apparel line.

ESPN:

As of now, Harden will average $16.78 million on the final three years of his deal with the Rockets and $15.38 million annually from Adidas. But if Harden hits certain benchmarks, it’s possible he will earn more annually from Adidas than the Rockets.

Harden now has the opportunity to join the ranks of those making more from their shoe deal than their employer.  This comes at a time when Nike is slated to become the official apparel supplier of the NBA beginning the 2016-17 season (previously Adidas) and Under Armour passed Adidas up as the the 2nd largest seller of apparel.  Does James Harden have the star power and enough celebrity appeal to lead Adidas in reclaiming market share and increasing sales?

Adidas seems to think so.  The hefty price they paid to roster the NBA’s MVP runner-up, and the truck full of shoes they delivered to his house, would suggest they are all in.

Columbia Sportswear Reveals ‘Tested Tough’ Campaign

Yesterday, Columbia Sportswear rolled out its new campaign developed by the Portland creative agency North.  As promised the ads include Gert Boyle, Chairman, and the tag line “Tested Tough” in the Pacific Northwest.

According to The Oregonian the $50 million campaign (biggest in company history) will be rolled out in 63 markets across Europe, Asia, South America and North America.

The Oregonian:

Columbia executives hope the ads resonate more with consumers compared with what’s been offered the past decade, Columbia chief marketing officer Stuart Redsun said in an interview with The Oregonian/OregonLive.

“The majority of them over the last six or seven years were about specific products or technology that had little to do with the emotional side of the Columbia brand,” said Redsun, a one-time Nike and Under Armour marketing employee who has a University of Oregon journalism degree. “We will still talk about features and tech but they all will be under the lens of this brand umbrella which we called ‘Tested Tough.'”

To assist the brand, relate and resonate with its consumers, Columbia has also hired two Directors of Toughness.  After a month long search and reviewing over 3,000 applicants the company selected two individuals to travel the world and test gear for six months. All of which will be captured and shared on Columbia’s blog.  Meet Zach and Lauren:

This campaign has the opportunity to show consumers what the brand is about and give them something they can identify.  Gert (91) will likely resonate most with Baby Boomers to Generation X and The Directors of Toughness (25 and 22) will likely connect with Generation Y-Z.

I look forward to following Zach and Lauren on their journey around the globe as well as monitoring the success of the campaign.

Under Armour is Making Moves

Back in April, the Portland Business Journal reported Under Armour’s plans to grow its footwear and innovation operations in Portland.  They purchased the 70,000 square foot former YMCA building, just south of the city, off of Barbur Blvd.  Under Armour, who has been quietly operating in Portland in an office at the North Park Blocks since 2013, is expecting the new space to be operational in 2016.  Portland, which is home to Nike, Columbia and Adidas, could give them the access to the talent they need to make a meaningful push into the footwear market.

Speaking of footwear, according to Forbes, 60% of Nike’s sales are from shoes compared to 12.5% for Under Armour.  Nike also holds 60% overall market share for US footwear and 96% in basketball. This means there is huge potential for Under Armour to claim footwear market share, specifically in basketball.  The company’s CEO, Kevin Plank, couldn’t have written a better narrative than the NBA Finals this year.  Under Armour went head-to-head with Nike and won.  That is, Under Armour’s leading man, Stephen Curry of the Golden State Warriors, took down Nike’s golden boy, LeBron James and the Cleveland Cavaliers, to become an NBA Champion.  With the win, sales of the CurryOne increased to a 1% market share of basketball shoes.  UA is hoping to take a bigger piece of the pie with the CurryTwo, which is set to release late October in the US.

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MVP handles 🏀 #StephGonnaSteph

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In an industry where endorsements are everything, having Stephen Curry (NBA MVP and Champ), Tom Brady (Super Bowl Champ), Jordan Spieth (#1 ranked golfer) and Misty Copeland (leading ballet dancer and one of the most influential people in the world) should bode well for UA’s top and bottom lines.  Additionally, Under Armour’s partnership with NBA’s youth program, Jr. NBA, and the NBA Draft Combine starting in 2018 and their “Rule Yourself” campaign should make significant impacts as well.


It looks like the overlooked stars, with chips on their shoulders, could be aligning for Under Armour.  Strike while the iron is hot.

Nike Unveils Oregon’s New Pioneers Uniform

Photo credit: Nike.com
Photo credit: Nike.com
Photo credit: Nike.com
Photo credit: Nike.com

Earlier this week Nike unveiled a new uniform for the University of Oregon’s football team, aptly named, the “Oregon Pioneers.”  It utilizes Nike Mach Speed technology and was designed exclusively for the Ducks.  It was created to pay tribute to Lewis and Clark and honor Oregon’s rich history.

From Nike:

“We have many discussions with the Oregon athletes, equipment staff and coaches,” says Todd Van Horne, Creative Director for Nike Football. “For this inspiring new uniform, we want to celebrate the state and its great founders and innovators.”

As an Oregon Alum, and dedicated fanatic, I fully embrace a tradition of innovation and the endless uniform combinations so every unveiling feels like Christmas.

According to Nike, here are the 10 THINGS TO KNOW ABOUT THE OREGON DUCKS UNIFORMS.

Some highlights are:

  1. The Duck as well as Lewis and Clark are featured on the helmets
  2. Lines on the helmet represent 2,200 miles of the Oregon Trail
  3. The jersey includes a pattern of the Oregon Trail and each one displays a different section of the map

This carefully crafted and uniquely designed masterpiece can be seen in motion this weekend when Oregon takes on Washington State at Autzen Stadium.  Hopefully the Ducks “Salute The State” with a win over the Cougs.

If you want in on the action, special edition apparel can be purchased at Nike.com.

Gert Boyle is Back in Columbia Sportswear’s New Ads

Photo Credit: www.thedailybeast.com
Photo Credit: http://www.thedailybeast.com

The Pacific Northwest’s toughest mother is back.  According to AdWeek, Columbia Sportswear chairman, Gert Boyle, will make her return to commercials tomorrow with the tag line “Tested Tough.”  If you ask her, she never left, “I’ve been coming to work at Columbia every day for more than 50 years.  They just hadn’t pointed the camera at me in a while for some reason” (AdWeek Q&A).

Gert’s 91 years of life include: fleeing Nazi Germany, taking over the company when her husband died and foiling a kidnapping attempt.  I’d say she’s the embodiment of “Tested Tough” and the campaign is in good hands.

From AdWeek:

“Most experts see Boyle’s return as a positive. “Older women are ‘in’—Joan Didion for Celine, Iris Apfel for Kate Spade so her resurrection of the ‘One Tough Mother’ persona could play into this,” said Michael Solomon, an industry consultant and professor of marketing at St. Joseph’s University in Philadelphia.  Plus, ’90s nostalgia appeals to many consumers, so it makes sense for companies to leverage that trend if they can, said Matt Powell, an analyst at NPD Group. “Retro is a very important trend right now. I see no downside here,” he said.

However, Nick Clark, executive creative director at brand consultancy The Partners, injected a note of caution: “I’m concerned when a brand feels it has to revive an icon from a previous era. It seems to lack vision,” he said. “But, in its favor, it would be a distinctive approach for the category.”

Tune in tomorrow to determine if resurrecting Gert Boyle is a move in the right direction.  I have a feeling it will pay dividends.  If Gert’s sass, toughness and “mother/grand mother knows best” persona doesn’t warm your heart, then she can probably sell you something that will.