Nike’s Olympic Gamble: Chasing Gold to Get Its Groove Back

I still remember my first pair of Jordan 1’s as a kid. Nike had us all believing we could “Just Do It” and somehow transform into world-class athletes by lacing up a pair of Air Jordans. But lately? Well, let’s just say the Swoosh has been dealt a bad hand. It was just a month ago that their stock plunged 20% in one day and it hasn’t gotten much better since then.  Sales have been lukewarm and competition is snapping at their heels. 

But fear not, Nike isn’t going down without a fight. Their Hail Mary? The 2024 Paris Olympics. That’s right, Nike is banking on a bunch of world-class athletes to remind the rest of us mere mortals why we should be dropping our hard-earned cash on their gear. And if the plan works, we might just witness one of the biggest comebacks since MJ himself came out of retirement to torch the Knicks for 45 points.

Nike recently rolled out their Olympic kits with more hype than Popeyes new chicken sandwich a couple years ago. We’re talking top athletes like America’s own Simone Biles and British sprint sensation Dina Asher-Smith compete in Nike’s latest creations. The idea? Get the world to focus on Nike’s high-performance gear like the Alphafly 3—a shoe that’s so advanced it might as well come with a cape and a theme song. At a cool $285, it’s not exactly a budget-friendly buy, but hey, who needs rent money when you can shave a few seconds off your 5K time, right?

(Source: Reuters)
But here’s the kicker (pun intended)—while Nike’s showcasing its top-tier gear on Olympic tracks and courts, the real money is in the mid-range products that people can actually afford (go figure). We’re talking about the Pegasus series, priced between $130 and $160. These are the shoes Nike is hoping will fly off the shelves as viewers at home get inspired by Olympians breaking records and kicking butt in their shoes.

Nike said it was spending more on this Olympics than any previous games, as it hopes to revive sales and compete with rivals. But, let’s not pretend Nike’s competition is sitting on the sidelines. Brands like On Running, Hoka, and even Lululemon (yes, the yoga pants people) have been creeping into Nike’s turf, and they’re not messing around. And let’s not forget Adidas, whose low-profile “terrace” shoes have been making Nike’s chunky basketball shoes look about as relevant as MySpace.

So, what’s at stake here? Oh, just a billion dollars. No biggie. Nike’s CFO, Matthew Friend, mentioned they’re reinvesting nearly a billion bucks into marketing for this Olympics, hoping to turn those eyeballs into dollar signs.

And so far, the strategy seems to be paying off. During the first week of the Olympics, Nike saw a surge in website traffic, with an impressive 86,900 visits leading to actual sales. Compare that to Adidas, who managed just 3,600 sales conversions, and you start to see why Nike’s got that swagger back.

(Source: Fast Company)
But let’s not get ahead of ourselves. Nike’s still got some work to do to regain its full mojo. As Drew Haines from StockX pointed out, “Nike is still a struggling brand overall. But the Olympics definitely drive interest in these things.” In other words, the O.G. isn’t out of the woods yet, but if their Olympic athletes keep racking up gold medals, we might just see Nike pull off one heck of a comeback.

Stocks.News holds positions in Lululemon and Nike.