Nike has spent a great deal of time looking to innovate, but now it wants to get back to the basics by focusing on its running shoe catalog.
The company’s efforts to sharpen its running brand image are in part due to the subdued success of its limited-edition franchise sneaker releases, the Wall Street Journal reported.
In addition, the company cut ties with retail partners like DSW and Urban Outfitters over the past few years in favor of selling on its SNKRS app. But sales in the first quarter of 2024 were flat year over year, and Nike shares are down 24% in the past year.
John Donahoe, Nike’s chief executive officer, told the Journal that the company lost its “sharp edge” and needed to boost its “disruptive innovation pipeline.” He acknowledged that with people returning to brick-and-mortar stores following the pandemic, Nike needed to invest more in retail.
Nike’s transition appears to be underway, which may be in part due to competition from other brands, such as On, Hoka, and Lululemon, which have chipped away at the company’s market share, forcing the athletic apparel giant to once again focus on its diehard and daily runners.
Donahoe told investors during the company’s earnings call in March that Nike plans to carefully manage its “most important franchises for the long-term health.” And as a result, it means that Nike’s “product portfolio will go through a period of transition over the coming quarters,” he added.
According to Donahoe, the company plans to focus on its cushioning platform “Air,” with the goal to enhance how athletes and everyday runners move. Air’s technology has already been deployed across Nike’s Olympic kits.
In addition to creating running shoes for performance innovation, Donahoe told investors during the company’s earnings call that he plans to bring “Air across our business, including our lifestyle portfolio.”