A Two Horse Race

There’s no question in my mind that the US footwear environment is shaping up to be a 2-horse race from a brand perspective. This is all about Nike and Under Armour.

I say that tongue in cheek, as we’re talking about a company with 35% share vs another with 1% share. But that gap will close to some degree. Will it come out of Nike? No way!! Nike won’t let that happen, and it has the deep pockets to prevent it. But that’s bad news for New Balance (10% share) Adidas (6%), and Reebok (3-4%).
  • I still think that the big winner is FL and FINL. The brands don’t compete on price, they compete on innovation. That brings traffic back to performance channels – from fashion channels (ie Journeys, and even dept stores).
  • How does it end? Nike maintains share or a growing market, Under Armour takes up share dramatically (from 1% up to 3-4%) but at a 300-500bp margin hit, AdiBok takes it on the chin with growth and margin as Reebok all but goes away in the US, and the athletic specialty retailers (FL, FINL) actually start to comp again.
  • Added consideration. With AdiBok tanking in the US, and with my prior post about how Adidas and Reebok basketball players are in the pole position with NBA jersey sales in China, one needs to ask if Nike is overspending to protect share in the US and is exposing itself in growthier markets?? Could Adidas be playing a pretty good game of chess after all? Make Nike spend up in one market to dominate in another? Definitely an issue to dig into.
Under Armour is the sole share-gainer in US footwear aside from Nike.
Nike is simply crushing it in the US.