Thirty-five years ago, Nike signed a promising NBA rookie named Michael Jordan to a $2.5 million deal and delivered his first signature sneaker, the Air Jordan 1. At the time, FN reported the signing as a “silver lining in its cloud,” as the athletic brand was losing money, laying off employees and suffering from poor morale. Today, Nike is the marketʼs most dominant brand, bringing in $39.1 billion for fiscal 2019, and its Jordan Brand label had its first $1 billion quarter last year.
Over the past seven-plus decades, the athletic market has remained much the same, with veterans Nike, Adidas and Puma still leading the way. However, the younger powerhouse Under Armour has grabbed a share. And upstarts Hoka One One and On have disrupted the industry in recent years. “Theyʼre addressing needs in the market that are not being met by other performance brands, and theyʼre rethinking what the consumer needs,” Matt Powell, senior sports industry adviser of The NPD Group Inc., said of the brands in August 2019.
But while the logos may be similar, the way people consume is vastly different. Chains such as Foot Locker and JD Sports do still draw the masses, but today brands rely on boutiques including Kith, Sneaker Politics and Sneakersnstuff to generate major excitement — a trend that started in the late 1990s with Concepts and other pioneers. And the power of e-commerce cannot be overstated: Nikeʼs SNKRS app, resale standout StockX and others have made it possible to shop from anywhere, at any time.
Further strengthening the digital revolution, the Yeezy juggernaut has barreled on, and consumers couldn’t get enough of new collabs between sports brands and high-end designers and retailers. But most notably, the Air Jordan franchise — which has fueled the industry for 35 years — proved its enduring desirability by dominating both retail and resale, aided recently by the 10-part docuseries on Jordanʼs final championship-winning season “The Last Dance.”
But in 2020, the sneaker market — and the world at large — has been rocked by the COVID-19 pandemic that has stifled brick-and-mortar retail and forced brands to alter release schedules. How the industry will look on the other side of the crisis is still anyoneʼs guess.