Nike spent two years trying to fix itself and last week lost the athlete most central to its future. Kylian Mbappé ended a partnership that began when he was nine years old and joined On, the fast-growing Swiss challenger. The BBC’s analysis of the sportswear giant’s latest results puts it bluntly: the turnaround under chief executive Elliott Hill is showing signs of working, but it is a marathon, and the baton just got thrown into traffic.
The scoreboard is grim history. Nike’s share price has fallen roughly 75 per cent over five years, wiping out hundreds of billions of dollars of market value, and the company was ejected from the S&P 100 index last month. Analyst Matt Powell catalogues the self-inflicted wounds: cutting ties with retail partners to sell direct, making limited-edition sneakers widely available, and spending research money on digital operations instead of product. “The more broadly available those shoes became, the fewer people were interested,” he told the BBC. The company’s own staff, it is joked, spent four years trying to turn Nike into eBay.
The eBay comparison is aimed at John Donahoe, the former eBay chief whose direct-to-consumer pivot coincided with the collapse. His four years saw sales surge while pandemic restrictions pushed shopping online, then unwind as cost-of-living pressures bit and demand weakened in China, the market that once absorbed every extra pair. Under Hill, a company veteran coaxed out of retirement, Nike has restored wholesale relationships and trimmed its digital ambitions. Results suggest the plan works. The pace suggests it needs time it may not have.
Because the real competition is no longer just product, it is gravity. On and Hoka took shelf space that used to belong to Nike, and they took it by being current. Tim Derdenger, a marketing and strategy academic, made the point without ceremony: the Michael Jordan deal, the Tiger Woods era, the Serena Williams years, all genuinely great, and “[I’m] not saying that what they did wasn’t great, but it was in the past. It’s not the future and it’s not the current and that is what drives apparel sales today.” Woods ended his association in 2024. Lamine Yamal, the next franchise talent, left too.
For brand licensors and sports agencies the read-across is uncomfortable. Nike built its modern identity by betting an entire basketball budget on one rookie in the mid-1980s and paying the NBA’s fines for red-and-black colourway violations as marketing spend. That playbook required a company confident enough to lose money on purpose. A firm 75 per cent down from its peak is not in that psychological state, which means the athletes of 2030 will be signed by whoever still is. On has just proved it can pay for the best player in the world. What it still needs to prove is that it can build a team around him. Nike’s answer will come one earnings report at a time.