Nike has big plans for Jordan Brand over the next 5 years, including separating them from Nike Basketball and making them a global brand. See all this and more of Nike's plans on the latest episode of Today in Sneaks.
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Nike Investor Day Meeting
As people that like and buy a lot of sneakers, one thing I think we should pay attention to more is the business side of things. I personally feel that in addition to the product, we should also buy stock in the companies we believe in. With that said, today Nike held their investor day and here are the top 5 things we learned:
First, the company plans to be a 50 BIllion dollar brand by the year 2020. That is just 5 years away and the company would have to continue 10-11% growth until that time. According to Matthew Kish, the company has been averaging that growth rate since 1989. Now how they do that is a mixture of things from possibly opening more accounts, keeping pricing competitive, and ultimately, making more products that you will want to buy. According to Piper Jaffery 27% of teens consider Nike the top Clothing Brand and 50% consider Nike the top Footwear Brand.
Second, Nike has third-largest design patent portfolio which is a big part of company's innovation streak. The portfolio seems to be specific to design and not utility and includes over 500 patents that apply directly to Flyknit. They specifically said design patents which is different from a utility patent. Design patent revolve around how a product looks and a utility revolves around how a product functions. This could be why Nike has Flyknit and adidas has Primeknit. Both of which function the say way.
Third, Nike CEO Mark Parker hinted at digitally connected NBA sneakers and uniforms in years ahead when their partnership officially begins. For those that are out of the loop, Nike announced that they would be taking over the rights to the NBA jerseys starting in the 2017-2018 season. adidas currently has those rights and decided not to re-up at the reported 8 year 1 billion dollar price tag. It is also reported that this will be the first time a brand’s logo will appear on an NBA jersey.
Fourth, Nike does over 1 billion in e-commerce annually according to Nike Brand President Trevor Edwards and expects that number to jump to 7 billion by the year 2020. By the same token the Nike Women’s business is at 5.7 billion right now and is projected to reach 11 million by 2020. Speaking of growth, both running and Jordan Brand have both more than doubled in size since 2013. Nike goals for Running in 2020 is 7.5 Billion alone. That is equal to the total sales numbers for all of Under Armour by 2017.
And finally, Jordan Brand. The company has been growing at an incredible pace and has as I just said, doubled since 2013. One of the more important things that came out of the investor day meeting today was that Nike CEO Mark Parker believes that Jordan can be even bigger. So big that they are going to start treating the company as its own category and believe that Jordan can become a global multi-category brand by 2020 that does more than just basketball. They expect sales of Jordan to reach 4.5 billion in that same timeframe.
So what does this all mean to you? On the surface, it means more options from Nike in every category, it means Nike is innovating at a very high level and we should see those innovations roll out over the next few years in both footwear and apparel. For Jordan, it means seeing the brand in a new light. From training to football to golf to running, they want Jordan to literally be a brand all on its own.
On the business side, if you are buying sneakers from the company, you need to look at this information and consider if you should be buying stock in the company. If you believe what you heard today, maybe you should look into it more, skip a pair of shoes and instead buy some stock. Totally up to you.
Alright I am going to get out of here, but let me know what you think? Can Nike do everything they said they would today? Let me know in the comments below. Be sure to hit that like button and subscribe as well if you haven’t already. I am Jacques Slade and as always, I appreciate you. I’ll see you soon.