It’s no secret that Nike and adidas aren’t the best of friends; with lawsuits, poached superstar endorsements and defecting designers, the Three Stripes has made serious attempts to dethrone its all-conquering arch-rival in the past few years. While in the fashion world, adidas has enjoyed a healthy resurgence thanks to its designer collaborations, faithful reissues of timeless classics and the headline-grabbing YEEZY Season project, in reality the brand is dwarfed by Nike – which owns a whopping 48% of the USA’s footwear market, while adidas’s 9% share has declined every year since 2011. To put the two brands’ stories into perspective, we’ve commissioned a handy set of infographics showing their market capitalizations over the past 15 years. Quick economics 101 – market capitalization is a brand’s share price multiplied by the number of shares it has sold, and is used as a proxy for the public opinion of a company’s net worth and by the investment community as a way of determining a company’s size. Nike’s market cap is illustrated in red, adidas’s in blue.
2001 – 2005: Even Stevens - Things were pretty equal between the two sportswear giants in the early ’00s. adidas started its hugely popular Y-3 label with Yohji Yamamoto (who originally wanted to work with Nike, FYI) and signed David Beckham up for a lifetime $160m deal, while Nike made some serious purchases – snapping up Hurley, Converse and Starter for an estimated total of $450m. Behind the scenes, current adidas CEO Herbert Hainer took over in 2001, Michael Jordan finally hung up his sneakers in 2003 and Nike co-founder Phil Knight stepped down from his position as CEO a year later.
2006 – 2010: The Plot Thickens - 2010 was, by all accounts, a spectacular year for Nike financially, as revenues reached $19 billion – that means Nike made as much money as the entire nation of Honduras – and its market cap rocketed to $63.45 billion. “We finished strong with a great quarter and accelerating momentum across the business,” Mark Parker commented at the time. “Nike is at its best when we focus on our two core values – innovation and inspiration.” The Nike president and CEO elaborated, touching on what would become an insane five years for the Swoosh. “Going forward you can expect to see more game-changing products, more compelling experiences wherever consumers touch our brands, and a laser focus on operational and financial excellence. These are the things that allow us to accelerate first and faster than everybody else.” Adidas, meanwhile, finished the decade far, far behind its rival financially.
2011 – 2015: World Domination - Nike’s revenues and prestige have rocketed in the past five years. A stock split (a tactic designed to make shares more readily available) saw a brief dip in the Swoosh’s market cap in 2012, which hasn’t stopped it reaching its present-day peak of over four times the size of adidas. The Three Stripes’ recent star signings – James Harden, Kanye West, NIGO and Pharrell Williams – haven’t made much difference to its bottom line, although no doubt the German brand is making serious attempts to change that in the future.
“Nike’s growth has come from great products, careful, thoughtful distribution and excellent marketing,” footwear expert Matt Powell of industry analysis group NPD told us. “In the sneaker business product always comes first. Great marketing can never lift bad product.” While Nike’s marketing prowess is renowned – the brand spends $8 million per day on so-called “demand creation” – the fact of the matter is their products are instant hits all over the world. In the USA – which accounts for 40% of all sportswear sales globally – Nike gear is lapped up on a huge scale, whether it’s next-level running gear (where it owns roughly 60% share of the market) or must-have basketball sneakers (a staggering 90%) or high-performance skate shoes (roughly 20%). “adidas has made a lot of right moves and, if patient, can gain back some of its lost share,” Powell summed up for us, adding “but no one is a threat to Nike right now.” Both Skechers and Under Armour have made huge gains in recent years – adidas is now the third biggest footwear brand in the States after UA – but none of them can, it seems, realistically topple Nike at the top of the sportswear game. ( By Alec Leach from Hignsnobiety.com )