Last week, Nike’s new CEO Elliott Hill announced a partnership with Kim Kardashian’s Skims clothing brand in an effort to reconnect with consumers. The deal had been in the works for over a year, so it likely had its inception under Donahoe, but the fact that Hill has been able to bring it to fruition is promising.
The new partnership, along with signs that Nike is starting to challenge Adidas with its retro sneaker offerings, should give investors confidence that Hill is beginning to turn the juggernaut around. Shares rose as much as 6% on the Skims news, the most since Hill was appointed in September.
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Nike said it would create a new brand— NikeSkims—with the shapewear label co-founded by Kardashian.
This isn’t a one-off collaboration, but a multi-year tie-up, more akin to the sports giant’s arrangement with Michael Jordan than, say, a limited-edition line with a luxury house. The first products under this deal will arrive in the US shortly, with a global expansion following next year.
NikeSkims will include clothing, shoes and accessories. The range will be focused on apparel that enhances the wearer’s performance on the running track or yoga mat, the types of venues where Nike is seeking to regain its prowess.
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Hill told investors in December that the company had lost its “obsession with sport.” That a recent ski-wear collaboration between Skims and outdoor brand The North Face quickly sold out is encouraging news for Nike.
But Nike, like its rival Adidas, is also a fashion company, something that is often overlooked. With Skims, which has pioneered bodycon styles in flesh-coloured tones, it has the chance to create garments, or sneakers, that move out of the gym to become fashion favourites.
And of course, Skims is fronted by one of the most famous women in the world, guaranteeing acres of press coverage and a tonne of social media chatter. Kardashian has managed to tap her contacts to create other high-profile partnerships, including LVMH’s Fendi, and most recently, Italian house Dolce & Gabbana.
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In line with Skims’ commitment to inclusivity, the new products will come in an extended size range. Meanwhile, as Hill seeks to win back retailers, they will be sold in third-party retail stores, as well as some of Nike’s and Skims’ own shops and on their websites.
NikeSkims is also a way for the sportswear company to capture more women shoppers, a category where it still punches below its weight.
While Nike’s overall women’s sales have stalled at about $8.6 billion, its women’s sports business has enjoyed double-digit growth over the past two years. Other efforts to reach female customers include its $28 million, eight-year contract with basketball player Caitlin Clark. Earlier this month, Nike returned to the Super Bowl for the first time in almost 30 years with an ad featuring a roster of female athletes, including Clark.
No financial details of NikeSkims have been disclosed. But there is a lot riding on the deal for both sides.
As one of Hill’s first big strategic moves, it needs to work. The hype around the partnership means there can be no room for products that miss the style mark, or that don’t hold up under intense training. Remember those Nike Olympic uniforms that were criticized for being too revealing? Sport and women’s fashion aren’t always an easy combination.
The new partnership, along with signs that Nike is starting to challenge Adidas with its retro sneaker offerings, should give investors confidence that Hill is beginning to turn the juggernaut around.
Adidas ended its partnership with Beyoncé two years ago, after the singer’s Ivy Park athleisure line failed to live up to its potential. NikeSkims has a better chance of success. Not only has Kardashian created huge recognition for the business, but Skims and Nike built the new collaboration from the ground up. Adidas took over from Ivy Park’s previous partner, and so had to relaunch the label.
For Kim Kardashian as well as Skims co-founder and CEO Jens Grede, eventually selling to Nike could be an alternative to an initial public offer. Skims was valued at $4 billion in a 2023 funding round.
Hill still has much to do—for example, clearing out unwanted Jordan and Dunk sneakers and replacing them with a raft of must-have shoes. But the agility he has shown in ramping up the brand’s retro styles—a market where Nike lost out to Adidas for so long—and now, in launching this surprise association with Skims, might help him give Nike’s sales a literal and metaphorical lift. ©Bloomberg
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