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Nike’s Strategy to Remain the Front Runner in North America

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Sep. 22 2015, Published 11:23 a.m. ET

The golf wars?

Like wholesale partner DICK’S Sporting Goods (DKS), Nike (NKE) has faced recent challenges in the golf category. But Nike has also recently unveiled new golf products, including the Golf Aeroloft jacket, and has introduced new golf footwear adapted from its more successful basketball shoe models, including the Nike Blazer for Michelle Wie, and the Air Jordan VI Retro Golf Shoe.

At the 2015 Wanamaker Trophy held in August, ten athletes on Nike’s golf roster, including Rory McIlroy and Tiger Woods, also showed off the company’s new golf apparel designs.

Under Armour-sponsored Jordan Spieth, who saw success on the golf course this year, has promoted the golf category significantly for Under Armour. This spate of new products and marketing from Nike may be a strategy response by the company.

 

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Athleisurewear competition heats up

DICK’S has been bullish on its recently launched athleisurewear line, CALIA, by Carrie Underwood. According to Edward W. Stack, DICK’S Chairman & CEO, the company expects CALIA to become the number three activewear brand for women in 2016. Several designer brands, including Tory Burch Sport and Derek Lam’s collaborative collection with Gap’s (GPS) Athleta, have also entered the activewear space lately.

According to the NPD Group, in 1Q15, Nike (NKE) and Under Armour (UA) held the number one and two places in the overall activewear market, with market shares of 13% and 6%, respectively.

Opportunity in women’s products

Both Nike and Under Armour are stepping up their focus on women’s and youth apparel and footwear products. As discussed in Part 2 of this series, these categories are growing fast. Nike’s opened several women’s only stores, and the company’s looking at $7 billion from women’s products by fiscal 2017.

To learn more about the women’s opportunity, read our earlier series, Nike and Activewear Peers Eye an Expanded Set of Opportunities.

Nike and Under Armour together constitute ~0.9% of the portfolio holdings in the iShares Russell 1000 Growth ETF (IWF) and ~0.5% of the holdings in the iShares Russell 1000 ETF (IWB).

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