((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto)) by Aishwarya Venugopal and Ananya Mariam Rajesh
Nike will launch new sneakers priced at $100 and under in countries around the world, its chief financial officer said Thursday, as the sportswear giant changes its product lineup as part of a plan to bring back sales on rails.
Nike NKE.N has significantly increased the price of its high-end Air Jordan 1 sneakers in recent years. These shoes are currently selling for up to $200 at select retailers including Nordstrom on Nike.com.
The high-end Air Force 1 sneakers, meanwhile, sell for around $150 on its website. For comparison, Adidas’ white and black three-stripe Samba and multi-colored Gazelle sell for $100 and $120, respectively.
Nike, which outlined a $2 billion cost-cutting plan last year, reported a surprise decline in sales in the most recent quarter. The company has seen sales growth slow as it battles competition from brands such as Deckers’ On and Hoka, while having to clear out excess inventory.
Shares of the sportswear giant fell 20% and were on track for their worst day on Friday, a day after Nike released disappointing results, which showed shoppers remain selective in their spending.
Executives also reported a decline in footfall at their outlet stores that sell discounted shoes and clothing, underscoring the growing pressure felt by the value shopper.
“This is likely an attempt to attract more price-sensitive consumers,” said Neil Saunders, an analyst at GlobalData, referring to the new sub-$100 clothing line. Nike CFO Matthew Friend told investors on Thursday: “Our teams are also pursuing opportunities across all price points.”
Americans are cautious about their spending, especially when it comes to nice-to-have, or non-essential, goods like trendy sneakers. However, Hoka’s Cloudflow 4 and Clifton 9 running shoes, which retail for $159.99 and $145, respectively, have recently been favored by many buyers.
Nike’s competitors in the “affordable” category include Hoka and Roger Federer backed-on, analysts said. “That’s an area where they can be more competitive in the near term,” said Truist Securities analyst Joseph Civello.
Nike’s launch of a new shoe line could be a risky move for the company as its sales decline worsens.
“It might work to some extent, but it doesn’t address the broader problem of lack of innovation at Paris Olympic sponsor Nike,” Mr. Saunders said.
Some key Nike models have recently lost value on the resale market, with the resale price of Air Jordan 1 Retro High OGs hitting a discount of about 32% on the site in May, according to Altan Insights, which tracks the collectible sneaker market.
