Nike will roll out new $100-and-under sneakers in countries around the world, its chief financial officer said Thursday, as the sportswear giant tweaks its product lineup in a plan aimed at getting sales back on track.
Nike has significantly hiked the list price of its top-end Air Jordan 1 sneakers in recent years. The shoes currently sell for as much as $200 at some retailers including Nordstrom and on Nike.com.
Top-end Air Force 1 sneakers meanwhile sell for about $150 on Nike¡¯s website. In comparison, rival Adidas¡¯ three-striped white and black Samba and multi-colored Gazelle sneakers are priced at $100 and $120 respectively.
Nike shares slumped Friday, ending the day down 19.98%, the biggest one-day percentage drop in the stock¡¯s history. The company on Thursday reported a surprise sales decline in its latest quarter. Nike has seen sales growth slow as it battles competition from Adidas, as well as the likes of On and Deckers¡¯ Hoka brand.
Executives also flagged softer traffic in its factory stores that sell discounted shoes and clothing, highlighting increasing pressure being felt by the value consumer.
¡°This is likely a bid to secure some more price-sensitive consumers,¡± GlobalData analyst Neil Saunders said, referring to the new $100-and-under line. Nike CFO Matthew Friend told investors on Thursday ¡°Our teams are also attacking opportunities across price points.¡±
Americans are cautious in their spending, especially when it comes to nice-to-have, or non-essential, merchandise like trendy sneakers. However, rival Cloudflow 4 and Hoka¡¯s Clifton 9 running shoes, which sell for $159.99 and $145 respectively, recently have been making the cut with many shoppers.
Nike¡¯s competitors in the ¡°affordable¡± category include Hoka and Roger Federer backed-On, analysts said. ¡°That¡¯s an area that they can compete in better in the near term,¡± said Truist Securities analyst Joseph Civello.
Nike¡¯s roll-out of a new line could be a risky move for the company because its sales decline is worsening.
¡°It might work to a degree, but it does not remedy the wider problem of a lack of innovation¡± at Nike, a sponsor of the U.S. Olympic and Paralympic Committee, Saunders said.
Some key Nike styles have recently lost value on the resale market, where Air Jordan 1 Retro High OGs resale price is at a discount of about 32% as of May, according to Altan Insights, which studies the collectible sneaker market.
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