Nike eyeing 'strategic reset' to take back market share in running category

Nike in recent years has “shifted its focus” from running to other areas of its business and competitors “swooped in, resulting in an increasingly fragmented market that has dented Nike’s finances and prompted a strategic reset,” according to Inti Pacheco of the WALL STREET JOURNAL. The company has “long monopolized the attention and wallets of avid runners,” but execs acknowledge that they “lost ground in the critical running category.” Now, they say that they are “doubling efforts to regain a stronger grasp of the market,” and they're “betting that a new line of shoes will give it a boost” during the Paris Olympics. Nike is “doubling the size of a team of reps” that meet with everyday runners and “advise them on products.” New Balance VP/Running Kevin Fitzpatrick said that the company has field reps “around the world who engage local running coaches and run club leaders.” Zurich-based On “takes a similar approach” but also “starts its own run clubs.” Pacheco noted some run clubs say that Nike has a “strong presence.” However, runners say that the company “doesn’t dominate the culture the way it once did largely because other companies have caught up by marketing themselves more aggressively on the ground.” Run-club leaders say that brands like Brooks, Hoka and Asics have “tapped into members’ willingness to try something new” (WALL STREET JOURNAL, 6/27).

SLOW MOVEMENT: In Portland, Matthew Kish wrote Nike closed the book on “one of the most disappointing years for financial performance in the company’s storied history.” Nike reported sales grew just 1% for the fiscal year that ended May 31. Kish: “Take away the pandemic, the 2008 financial crisis, and the Asian financial crisis in the late 1990s, and Nike hasn’t reported growth that slow since the first term of Bill Clinton’s presidency.” Nike “expects this year will be even worse for sales” and its forecast “calls for a year-over-year decline.” Under CEO John Donahoe’s leadership, Nike “leaned heavily into direct-to-consumer sales and retro sneakers, including its classic leather Dunks.” Spurning retailers “opened more shelf space for competitors at sporting goods stores.” The throwback styling, while “reliably popular, left room for companies with fresh designs to draw customers’ attention.” Nike EVP & CFO Matt Friend said that the company “expects sales will decrease in the mid-single digits” in the fiscal year that started June 1, “including a 10% decrease in the current quarter.” But he said that Nike “expects sales to improve around the holidays as more new products hit store shelves” (Portland OREGONIAN, 6/27).