A helping hand for Nike?
Partnering with SKIMS is the perfect opportunity for Nike to bounce back and boost flagging sales. The company, which is dominant in the men's sports-oriented segment, has been showing a decline for several quarters, especially in its most important market, the US. In the second fiscal quarter of 2025, it reported an 8 percent decline in North America. In Europe, the Middle East and Africa, sales were down 7 percent, while Asia Pacific and Latin America saw a 3 percent decline in demand. The problem is also posed by competitors who have been able to get on the bandwagon and bring out women's collections long before Nike. According to Reuters, it was women's sweatpants and yoga leggings that were key to the growth of rival Lululemon. Nike therefore recognises the urgency for change and has outlined a plan to restructure its approach, particularly by splitting the business along gender lines.
SKIMS conquers the market
Growing competition and declining demand have forced an American sportswear manufacturer to bring something innovative to the table. The NikeSKIMS line, including activewear, footwear and shoes, will be launched, combining Nike's expertise in sportswear with SKIMS' focus on all body types. In fact, SKIMS' advantage is not only the popularity of its founder, but also its strong marketing and social media presence, which has seen the brand grow rapidly since its launch in 2019 (with the original name Kimono). Her first collaboration with the brand Fenti was immediately sold out. It was followed by a line for US athletes at the Olympics, and by 2023, SKIMS was worth $4 billion. It teamed up with luxury fashion house Dolce & Gabbana, Swarovski and even outdoor brand The North Face, with the collection selling out in minutes. The focus on women is also evidenced by the collaboration with actress Olivia Munn, which was aimed at breast cancer awareness. From the above, it follows that SKIMS was a logical choice for the creation of Nike's women's line and "a certain guarantee for the success of the whole project". Customers in the US can look forward to the collection in the spring. A global launch is planned for next year.
Nike's shares have rallied after years of decline
Nike shares rose 4.5 percent on the NYSE after the news was announced on Feb. 18, 2025. Meanwhile, they have written nearly 47 percent off their value over the past three years, according to Investing.com data.[1] Looking at 5-year performance, we can see a slightly lower drop at 23 percent. Overall, however, we can say that this year so far has been on a positive trend for the company's stock value. In fact, since the beginning of the year, despite some corrections, the stock is in the black by more than 4 percent. On February 20, 2025, the stock was trading at a price of $77. By comparison, during the all-time high that the company's price reached on November 5, 2021, one share cost more than $171, according to Macrotrends.net data, and the company's market capitalization was around $280 billion during that period.* The market capitalization as of February 20, 2025 was "only" $113.89 billion, according to Companiesmarketcap.com.*
Nike's stock performance over the past 5 years. (Source: Investing.com)*
Who did the celebrities help?
Nike is not the first company to use celebrity influence to improve brand dynamics. Many large corporations have successfully leveraged the cultural significance of celebrities to expand their reach, increase revenue and connect with new audiences. Nike's direct competitor, Adidas, entered into a collaboration with controversial rapper Kanye West back in 2015. Their Yeezy product line brought the manufacturer billions of dollars in revenue and became a dominant player in the market. The relationship soured after the rapper's racist comments and the collaboration was terminated in 2022. Adidas felt the decision when it posted its first loss in 30 years of €50 million in 2023, according to Finance Yahoo data. Slightly from a different keg is vegan food brand Beyond Meat. The latter, like Nike, has joined forces with Kim Kardashian and appointed her as its "chief flavour advisor" to raise awareness of plant-based meat substitutes. The move put Beyond Meat in the spotlight, which not only boosted its credibility but significantly increased the company's stock market value.*
Beyond Meat's stock performance over the past 5 years. (Source: Investing.com)*
Cooperation as a reboot
The above examples highlight the undeniable power of celebrity-backed collaborations. If Nike's collaboration with the brand is at least as successful as Kim Kardashian's previous collaborations, it will mark a reboot for the sports giant and a good start for a whole new era that could kick-start the company's growth as a whole and boost its stock market performance. If a history of successful collaborations with the right name is any indicator, teaming up with a celebrity like Kim Kardashian at the right time could be the key to a whole new and successful era for Nike. However, the flip side should not be forgotten, as was the case with Adidas.[1]
* Past performance is no guarantee of future results.
[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.
[1] This data is for the period 1 February 2022 to 1 February 2025
