The sneaker and apparel giant Nike is in its worst moment in a long time. It continues to lead, it continues to dominate, but it faces a perfect storm of internal and external challenges that are holding it back.

Because this is important. The stumble of all of Nike is not just a corporate glitch, but a symbol of a changing and complex landscape for retail and consumer preferences in the post-pandemic era.

What’s going on.

• Nike’s digital sales fell 10% in the last fiscal quarter; this was its worst performance since the late 1990s. 2% in stores.
• The company announced it would lay off 2% of its workforce to shave $2 billion.
• Shares fell almost 20% after the latest results were announced, hitting their lowest levels since March 2020, when prices crashed with the arrival of the pandemic.

The decline so far this year is close to 30%.

Context. Nike has invested heavily in e-commerce and direct-to-consumer (D2C) sales during the pandemic. It has scaled back its relationships with traditional retailers and even closed some brick-and-mortar stores.

This strategy was led by new CEO John Donahoe. It looked right at first, but the brand’s founder, the legendary Phil Knight, is now showing his cracks despite showing public support for the CEO. Neil Saunders, analyst and consultant retail We talked at GlobalData Inside Retail Asia Nike’s current form:

“Compared to a market that continues to grow and competitors, many of whom are growing sales at a rapid pace, Nike looks slow and out of shape.”

Between the lines. Nike’s decline is not limited to just numbers. The company faces some criticism for overly controversial designs, like its controversial MLB uniforms or women’s tracksuits for the Olympic Games. Criticism suggests there is an over-focus on visuals and a disconnect from the needs of athletes.

Newer brands like On or Hoka are gaining market share running Since the pandemic, Nike has not reacted significantly. Also, business life style There had been a sharp decline in previous months, as the brand’s finance director, Matthew Friend, admitted.

look ahead. While a rapid recovery seems complicated, Nike’s hopes are now pinned on the Paris Olympic Games as a platform from which to relaunch its brand.

According to UBS analyst Jay Sole, Market Watch:

“Our conclusion is that Nike’s earnings recovery will not be rapid. We believe Nike is embarking on a multi-year reset of its business to return to healthy growth rates.”

in perspectiveNike, the symbol of innovation and dominance in the sports market, is in a tough race to regain its former form.

Its ability to adapt to changing consumer demands and recalibrate its strategy will determine whether it can consolidate its lead or if this decline is the start of a longer one.

Featured image | Nelson Ndongala on Unsplash

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