The latest

Nike and Adidas are facing their biggest industry shake-up in decades, as rising rivals, changing tastes and cost-of-living pressure erode the dominance built around footwear staples including Air Jordan, Air Max, Samba and Superstar. Nike still leads the global sportswear market but has failed to grow sales for almost three years. Its shares are down nearly 80% from their peak, while Adidas has fallen almost 50%, wiping roughly £147 billion from their combined market value. The strain has reached retailers: JD Sports, whose fortunes are closely tied to Nike, issued a profit warning in August.

Details

• Strategic opening: Tom Astrella, co-founder of consultancy the Footsoldiers, said strategic missteps had opened the door to new brands. He accused Nike of “overmilking the classics” while innovation slowed, adding that younger consumers increasingly see avoiding the biggest labels as culturally appealing.
• Retail retreat: Both companies invested heavily in direct-to-consumer sales, particularly online, during the pandemic. Business strategist Sebastien Willefert called the strategy “a bit of a flop”, saying it allowed emerging brands to expand their shelf visibility in stores while social media lowered marketing barriers.
• Running challengers: The post-pandemic running boom benefited Hoka and Swiss brand On. Founded in 2010 after triathlete Olivier Bernhard experimented with garden hose beneath his trainers, On has become a £7 billion business offering cushioned soles and moulded, spray-on shoes.
• Celebrity migration: Zendaya represents On, Hailey Bieber wears Salomon and Rihanna selected Puma for her Fenty collaboration. Taylor Swift is now frequently pictured in Hoka and New Balance trainers, while Harry Kane joined Skechers, Lewis Hamilton wears Lululemon and Emma Raducanu competes in Uniqlo.
• China challenge: Nike’s Chinese sales have fallen by almost a third since 2021 amid growing enthusiasm for domestic fashion under the “guochao”, or “China chic”, trend. Chinese competitor Anta opened its first US store in February and has signed Kyrie Irving and skier Eileen Gu.
• Adidas balance: Adidas has performed relatively well, supported by enduring demand for its Originals range, including Sambas and Gazelles, and interest in its 3D-printed footwear. However, ending its Kanye West partnership in 2022 over his antisemitic comments caused a significant loss of Yeezy business.

Background

Nike and Adidas have shaped trainer culture for about half a century. Their position is now being challenged simultaneously by performance specialists, Chinese brands and luxury designers such as Balenciaga, which sells high-end leggings, tracksuits and gym bags.

What’s next

The next indicators will be whether Nike returns to sales growth after almost three years, how its China business develops and whether On, Hoka and Anta secure more retail shelf space.