Nike's success and its new deals with the Cowboys and Deion
Sanders have some retailers worried that the company's "rampage
might mark the return of the arrogance and mistreatment of years
past," according to Jeff Jensen in this week's AD AGE. Leagues
such as the NFL "are growing increasingly suspicious" of Nike's
ambitions, and within Nike Inc. there are "concerns" over the
future role of the company. For the fall, Nike will unveil new
ads for men's and women's basketball and "raise some eyebrows
with an upcoming campaign about boxing," while their main
competitor, Reebok, has no new ads scheduled until the holidays.
Nike Dir of Worldwide Sales Joe McCarthy: "We're the leader in
this industry, and if there's an issue facing our industry, we're
going to use our advertising to take a stand and be provocative."
Nike is showing a "marked improvement" in international sales, as
they "move away from regional ad strategies, which have yielded
mixed results, and speak with a distinctive voice to each
country."
DOMESTIC CHALLENGE: At home, a "challenge" for Nike will be
not to "alienate or take for granted its partners and
competitors, regardless of their size." And although Nike has
tried to get an NFL Pro Line apparel license for five years, the
league "has resisted, in part because of its concern over what
Nike has been doing with its college team licenses." Nike says
its relationship with retailers will become more important as
they expand into hockey, and potentially, cycling. Some also
believe Nike could evolve into "a broad-based entertainment
company," competing with Disney and Sega in theme parks and
video-games. But the race for No. 1 in shoes may not be over.
Roberto Muller, a former top Reebok exec: "It's a long race ...
but Reebok shouldn't stop chasing Nike. ... Reebok has the
resources, they just need the courage" (AD AGE ONLINE, 9/18).
JUST CHECK THE NUMBERS: This morning, Nike reported record
revenues and earnings for the first quarter ended August 31. Net
income totaled $164.8M ($2.26 share), compared to $106M
($1.43/share) for the first quarter last year. Revenues
increased 38% to $1.61B. Nike also announced that its board has
approved a 2-for-1 stock split (Nike Inc.). Look for more
details in tomorrow's DAILY.
RETAIL ROUND-UP: In Portland, the sneaker industry "cold
war" is examined by Jeff Manning. Reebok has "declined with
stunning swiftness from a formidable to a fading No. 2 in the
athletic shoe and apparel business this year." Reebok's problems
are "good news" for Adidas AG and Fila (Jeff Manning, Portland
OREGONIAN, 9/15)....Fila USA is "preparing the way for the second
coming" of Grant Hill. An ad campaign by FCB/Leber Katz
Partners, New York, will hit in September, which will support the
November 15 launch of "its second generation" of Fila's Hill
signature shoes, "The Hill" (AD AGE ONLINE, 9/18).
