Nike set to launch new line of sneakers priced under $100. This initiative, announced by the company’s financial director, Matthew Friend, is part of a broader strategy aimed at reinvigorating sales and meeting consumer expectations in the face of an uncertain economic environment.
Nike repositions itself in the face of falling sales
These last years, Nike has significantly increased the prices of its flagship modelssuch as the Air Jordan 1 and Air Force 1, selling for up to $200 and $150, respectively. In comparison, competitors like Adidas offer popular models, such as the Samba and Gazelle, at more accessible price points of $100 and $120.
The company, based in Beaverton, Oregon, has experienced a surprise drop in sales in the last quarterwith a 2% decline in revenue to $12.6 billion for the March-May period. The decline was exacerbated by a 10% decline in online sales, particularly in the lifestyle category.
A response to competition
Faced with increased competition from brands such as Hoka and On, Nike is trying to reposition its products to attract a broader, more price-sensitive customer base. The launch of this new line is, however, seen as a risky bet. Analysts believe that while the strategy may work to some extent, it does not address the broader problem of a lack of innovation at Nike. Indeed, some of Nike’s key models, such as the Air Jordan 1 Retro High OG, saw their resale value drop by 32% in May, according to Altan Insights.
Despite these challenges, Nike managed to clear Net profit up 45% in fourth quarterthanks to better control of operational costs. However, the company anticipates a year of “transition” in 2025, with an expected decline in its turnover of around 5%.
Nike hopes that this new strategy of launching affordable products can not only attract new customers, but also regain the confidence of investors, shaken by the company’s recent financial performance. The brand is banking on improving its margins thanks to reduced promotions and lower production costs.
