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Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

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Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#371

Post by dpark »

motoxpro wrote: post #258
darkwater wrote: post #108

Earlier quoted context omitted.

It would be great and funny to have access to the internal presentation about why they needed to pursue that and all the benefits. That kind of business decks are always so plastered with wishful thinking that really makes me wonder how business people can keep deceiving themselves like that in every single company they work.

They are a public company and the strategy was very VERY public. You can listen to the earnings calls. It's not like they wanted to hide it. It actually went EXTREMLY well for a year or so. I agree that it was a bad decision, but the logic wasn't stupid. Just a misunderstanding of what made the company valuable. I always wonder why the monday morning quarterbacks who think these are such obvious choices in the moment…

It went great because they started it in the pandemic when essentially all shopping shifted to online, and at that point, why not buy direct from Nike vs online from Macy’s or whatever.

I totally see why they thought the strategy was a hit but hindsight is 20/20 and it seems now that this was a correlation and causation mixup. They should have been asking why they were losing mindshare to their competition instead of asking how they could wring more profit out of the same customer base.

Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#372

Post by jarym »

ericmay wrote: post #367
jarym wrote: post #349

Earlier quoted context omitted.

https://andrewdremin.com/nike-dtc-strategy-failure-2026/ talks about how they changed their approach to product development to rehash old designs for a more fashion led approach.

A failure of design rehash is still an engineering failure in this industry. I don't think you can cleanly separate the two like you are more able to, though imperfectly, in software. I don't mean to suggest that there aren't other problems or that spreadsheet people aren't dragging the company down. Changing to a more D2C business model was likely a bad idea, for example, which has influence/influenced by engineerin…

It was during covid, during a time when people were starting to think retail would never go back to normal and everyone would switch to exclusively online buying.

It was a bet that was unsupported by data (there wasn't any) and turned out to be wrong.

Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#373

Post by dpark »

motoxpro wrote: post #263
zaptheimpaler wrote: post #168

Earlier quoted context omitted.

Probably went something like - we need infinite growth to appease the stock market morons - we can’t raise prices any more for our shoes - what if we cut out the middlemen retail stores and disintermediated to save money - we will be digital native, COVID is here, the world is digital - RIP.

Also, ironically, the pitch was supposed to be a win win: If we cut out the middleman and stop spending so much on sponsoring athletes and sports, we can pass those savings on to customers, bringing us more sales at lower cost to consumers and higher margin for us because our cost structure is lower. Turns out people don't always want lower-priced products.

> we can pass those savings on to customers

Did they ever say that? I have trouble imagining any exec at Nike plan for passing savings onto consumers.

Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#374

Post by eudamoniac »

hyperlinerapp wrote: post #24

The marketing campaign they launched in April 2023 also deteriorated their brand position. It earned them woke coins, but the NPV of all those future woke coins flows was negative.

As soon as I saw that ad I knew Nike was not going to be "cool" for much longer. I switched to Brooks after that.

Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#375

Post by slopinthebag »

aczerepinski wrote: post #242

A huge percentage of Nike’s sales come from vintage shoes like dunks, air force ones, Jordan 1s, etc. By modern standards, they aren’t good shoes. They aren’t suitable for the sport they were originally designed for, and they aren’t comfortable compared to modern lifestyle shoes. I can’t believe Nike is ok with that being how loads of people experience the brand. Why not spend an extra $2 upgrading the cushioning to…

cuz jordans (especially 1s and 3s), dunks, af1s, air maxes etc look great and have heritage behind them. same reason people wear converse (awful basketball shoe). idk if they could change them without pissing off a lot of ppl.

Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#376

Post by dpark »

omnimus wrote: post #159
dpark wrote: post #61

Earlier quoted context omitted.

> it looks like shoes for retirees This is in style now. My tween daughter and her peers all own shoes that look geriatric to my eyes. I see teenagers walking around in New Balance shoes that look like my dad would have owned them 20 years ago.

This is actually not at all style of On shoes. The New Balance / Adidas / Nike 90s "dad shoes" have been cool for almost a decade now (Balenciaga released their "dad" sneaker in 2016). On shoes look like shoes for retirees right now. Teenagers don't wear On shoes.

Fair. The kids are buying dad shoes from 20 years ago. On looks like dad shoes from right now.

Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#377

Post by nater5000 »

listless wrote: post #369
alexpotato wrote: post #219

There is a great article [0] that has some interesting points about this: - Nike used to be very "male coded" e.g. "Be like Mike" - So much so that they were one of the only companies where men bought more clothes than women - The powers that be wanted to go after the "Adjacent Whale" (explained in the article) that was the female consumer - They ended up alienating their core customer base while competing poorly wit…

This makes sense from a business perspective. If your primary customers are men, you wanna branch out of that real quick. I think something like ~80% of all consumer spending in the US is done by women. You gotta go after that. That's an ENORMOUS market to just leave on the table. That said, I fail to see how trying to attract more women alienated men. I just don't buy that culture war as a reason. I remember Nike do…

>I fail to see how trying to attract more women alienated men

It's less about Nike making decisions that men don't like and more about Nike spreading themselves too thin.

Just think about Nike as a company: the products they actually sell are generic, barely mid-tier clothes and athletic gear. Their actual product is their brand. That's why all of their products prominently display their iconic logo and everyone and their grandma knows their slogan is "Just do it."

A brand is only as valuable as the awareness of the brand. So every dollar that Nike spends on marketing is incredibly important for driving their bottom line. If you split those marketing dollars in an attempt to reach a new audience, you're necessarily spending less of those marketing dollars on the existing audience that found your brand valuable. So, in trying to attract more women, Nike ended up attracting less men.

The question, really, is how important is this dynamic. Apparently, it's pretty important. I don't think Nike made a blunder in attempting to expand their audience. I'm willing to bet that they started seeing some writing on the walls which suggested not doing anything was going to be bad enough that taking the risk to spread themselves thin was appropriate. But at the end of the day, I think modern consumerism moves too fast and is so much less concentrated than it was in the past (when Nike dominated) that they just couldn't keep everything together as effectively as they needed to.

Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#378

Post by dublinben »

omnimus wrote: post #52
harshalizee wrote: post #37

Earlier quoted context omitted.

Today, you're one of the lucky 10000![1] For me personally, On shoes are probably the most comfortable pairs I've ever owned. Their waterproof sneakers are the only ones I've ever had that's actually fully waterproof. If you're looking for a decent pair of sneakers you should at least take a look at their Cloud line. [1] https://xkcd.com/1053/

On shoes are also very ugly. I don't think they have a single pair that has any style. I would love to try them but it looks like shoes for retirees.

This model[0] is touted as one of their top three "bestsellers" and is completely unobjectionable, as far as contemporary sneakers go. It's a plain white, leather-looking tennis shoe that doesn't even have their brand's stupid characteristic sole that collects gravel.

Even typically goofy looking Hoka will sell you something appropriate for all-day work wear, anti-slip soles and all.[1] It comes in black, white, and monochrome grey.

Nike doesn't seem capable of making a shoe that looks like a normal person could wear it in real life. Most of them look more appropriate for a space station than planet earth.

[0] https://www.on.com/en-us/products/the-roger-advantage-m-3mf3...

[1] https://www.hoka.com/en/us/mens-recovery-comfort-shoes/bondi...

Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#379

Post by allthetime »

throwaway2037 wrote: post #143
allthetime wrote: post #31

Earlier quoted context omitted.

Allbirds never made serious running shoes. Hoka grew out of the ultra running scene and broadened their offering.. On are European and went hard with their unusual sole design.

Hoka has a fairly unusual corporate history. They were founded in 2009 in Annecy, France. (Yeah, read that twice. No hate on Annecy, but that is a mega brand being started from a tiny French city!) Then in 2013, they were acquired by California-based Deckers Brands which is also the owner of UGG and Teva. The real question: How did they become the Lululemon of casual sneakers? Just like lots of women who don't do yog…

Maybe selection bias from where you live. I live next to endless world class hiking / trail running and everyone I see in hokas is using them.

They are also wildly supportive and absolutely suitable for wear as a non athlete who walks or is on their feet a lot.

They are popular it’s not surprising. See: how most people in $1000 Arc’teryx jackets arent summitting a mountain

Re: Nike exits the S&P 100 after 18 years and a $200B market-cap wipeout

#380

Post by lifestyleguru »

jimt1234 wrote: post #25

I feel like athletic shoes have mostly become what they were always meant to be: athletic shoes - you know, for doing something athletic , not just for going to Costco or McDonalds or whatever else. Back in the 90s, athletic shoes, like Nike, were for everything ; they were the default shoe style. Now people wear Crocs or flip-flops or something else, not necessarily athletic shoes. So now the market is smaller for N…

I agree here. Crocs and slides are default footwear now anytime outside winter, including indoors and outdoors. It's unimaginable but it has happened over the last few years. Other than crocs and slides youngsters are really confused wearing "Balenciaga style" sneakers and their copycats.
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