According to the company’s chief financial officer, Nike will introduce new trainers priced under $100 in several regions on Thursday. This move is part of the sportswear giant’s strategy to restructure its product selection and boost sales.

The advertised price of Nike’s premium Air Jordan 1 trainers has increased dramatically in recent years. Right now, Nordstrom and other shops are selling the sneakers for as much as $200 on Nike.com.

Conversely, high-end Air Force 1 trainers retail for around $150 on the Nike website. Comparatively speaking, rival Adidas charges $120 and $100 for their multicoloured Gazelle and three-striped white and black Samba trainers, respectively.

Nike’s stock fell sharply on Friday, closing the day down 19.98%—the worst percentage decline in the firm’s history in a single day.

The business revealed a startling drop in sales for its most recent quarter on Thursday. Sales growth for Nike has slowed as the company competes with Adidas and other brands like On and Deckers’ Hoka line.

Additionally, executives noticed a decline in foot traffic at its factory stores, which offer deeply reduced apparel and shoes, underscoring the growing influence of value consumers.

Referring to the new $100-and-under queue, GlobalData analyst Neil Saunders stated that this is probably an attempt to win over some more price-conscious customers. Investors were informed on Thursday by Nike CFO Matthew Friend that “Our teams are also attacking opportunities across price points.”

Spending is frugal among Americans, particularly when it comes to nice-to-have (or non-essential) items like designer trainers.

But recently, a lot of customers have started choosing the competing Cloudflow 4 and Hoka’s Clifton 9 running shoes, which retail for $159.99 and $145, respectively.

According to pundits, Hoka and Roger Federer backed-On are among Nike’s “affordable” rivals. Analyst Joseph Civello of Truist Securities stated, “In the near term, they can compete better in that area.”

Nike’s decision to launch a new range may be a hazardous one given the company’s deteriorating sales downturn.

According to Saunders, “it might work to a degree, but it does not remedy the wider problem of a lack of innovation” at Nike, an Olympic sponsor in Paris.

According to Altan Insights, which researches the collectible sneaker industry, the Air Jordan 1 Retro High OGs resale price is at a discount of around 32% as of May, reflecting the recent decline in value of other iconic Nike designs.

(Adapted from Reuters.com)

Categories: Economy & Finance, Strategy, Uncategorized