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Tuesday, November 15, 2016

UNDER ARMOR and ADIDAS Sruggle to Become the Rival to NIKE


When you hear the name Nike, the first thing most would interpret it to be is not the Greek Goddess that is its namesake, but rather the brand name of one of the world’s – or safe to say the world’s – number one line of athletic shoes, sportswear and peripheral accessories. The “swoosh” logo is so iconic that it was included as an in-joke in the wonderfully anachronistic period movie of 2001, “a Knight’s Tale” starring the late Heath Ledger; his armor had the swoosh. Anyway, I can’t wax poetic enough on how the Nike name is a pretty cool brand. But reality sinks in with an onset of decreasing future sales, not to mention possible contenders to its throne from two would-be usurpers.

According to Business Insider, there have been fewer orders from retail stores for Nike, resulting in a larger amount of their inventory that would need to be sold fast as stated on the company’s most recent quarterly report. This moment of weakness from the company that soared as high as the likes of Michael Jordan thanks to the Nike Air Jordan footwear, has invited a big push from two other major sporting labels in a bid to dethrone the king as it were. Who are these upstarts then?

These are none other than similarly long-running German brand Adidas and a younger American competitor, Under Armor from Baltimore. With an upsurge in introducing new products and expanding into new categories of the wide-variety sportswear world, both Under Armor and Adidas are beginning to wear away at the former lion’s share of Nike in the sales of shoes and athletic apparel. It’s that bad; Nike is on unsteady footing at the top of the sportswear heap.

But which of the two brands have it to be most likely to toppled Nike in a golden opportunity? Looking at what each competing company has got, Under Armor has been enjoying a respectable 30% growth for the past two years and has beaten profit expectations this year. In addition, the brand’s market is for the moment concentrated in the US, and its simplicity approach has clicked with a solid number of consumers. The fact that Steph Curry has his own Under Armor basketball shoe line now is a massive bonus.

As for Adidas, it’s got time and experience on its side. Their 2015 worldwide net revenue is $18 billion to UA’s $3.96 billion. In fact, they’ve surpassed UA to become second only to Nike in the US market as of last week, thanks to a renewed American focus apart from their primary European market.

They even have their own celebrity sneaker line bearing Kanye West’s name. I can’t help but say, “Now Kanye, I’m real happy for you, I’m a let you finish.”

So, who do you think has a shot at beating Nike at its own game? Or do they?

Photo Credit to http://finance.yahoo.com/


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