Nike’s (NKE) iconic Jordan Brand, which at one time instantly sold out weekly releases, has unexpectedly struggled over the last several quarters. As fashion has trended away from high-end basketball sneakers and towards low-tops that best fit with skinny jeans and joggers, the Jumpman Brand has struggled to adjust. Nike’s solution has been to increase the volume of Jordan sneaker releases; but with most pairs lacking high demand, many fail to sell out immediately, raising the possibility of long-term brand erosion.
Howie Long-Short: In January 2015, Jordan Brand made up 96% of the sneaker resale market. Adidas (ADDYY) had 1%. Adidas now has 45%. Considering the sneaker resale market is estimated to be valued at $1.2 billion, that’s a lot of Adidas shoes being bought (and resold) in place of Jordan’s.
Fan Marino: Morgan Stanley says that “Nike has lost its core sneaker enthusiast customer to Adidas.” As a sneaker head, I say that is a gross exaggeration. I recently bought a pair of Adidas EQT Support ADV. They are already on their way back to Adidas. They were a pain to put on, the wife hated the way they looked and I didn’t find them to be particularly comfortable.