Names printing solid numbers and still getting sold. But the overall market absolutely ripping at the front part of the week.

None of that is the main story in this issue.

The main story is a brand that forgot what it was selling.

Nike still has distribution, heritage and cash flow. What it no longer has is the voice that made people care. Aspiration left. The numbers followed. That is the Big Read.

After that, Theme Watch, what we are ignoring, and one question for the book.

Let’s get into it…

“Nike is a brand of China for China,” said Nike CFO Matt Friend.

That is the mindset that has taken hold.

An American company built on American consumers and American ambition starts talking as if its real home is a market that has been soft for years. China consumer sentiment has been battered since COVID. Sales there keep falling.

Domestic brands keep taking ground. Yet the people running Nike keep circling back to deep localisation and treating China like its their saviour.

The United States is still the largest consumer market on earth. Nike still makes most of its money there.

The brand still carries an American origin story. Leading with China when that market is weak shows how far the leadership has drifted from the people who actually built the company.

The Numbers

The most recent reported numbers only underline it. In the quarter ended 31st May revenue hit $10.97 billion, down 1 percent on a reported basis and 4 percent without currency exchange considered.

Greater China dropped 12 percent reported and 17 percent currency neutral. Full year revenue for the year to May finished at $46.4 billion, flat on the surface and down 2 percent underneath. Inventory stayed at 7.5 billion.

The share price is DOGSHIT.

Market value sits near 62 billion.

Guidance still points to more declines in the low to mid single digits through the first half of the new fiscal year.

On the call the language stayed careful. Progress is uneven. Foundations are being rebuilt. The medicine is working. The results just are not there yet.

People managing a slow slide instead of facing the real problem.

What Nike Used to Be

Twenty years ago Nike stood for being elite.

It was the brand of the kid who stayed out late practising, the player who refused the limit other people put on him. The faces were Tiger Woods, Wayne Rooney, Cristiano Ronaldo.

The message was simple…

You can become something more if you are willing to suffer for it. That hunger built everything. The shoes and shirts were just the delivery system.

Somewhere that voice got purposely lost.

Marketing and product stretched into broad inclusion and lifestyle acceptance. The brand that once told you to be the best started telling you it was enough just to be yourself.

Nobody actually wants that.

People want to be accepted for being the best, or at least for aspiring to be the best. That drive is what made Nike matter.

Swap it for the corporate fashion of the moment and the brand turns forgettable and bland.

The People Problem

The people problem sits under all of it.

Nike let in too many non sports, non competitive staff, especially in marketing, brand and human resources. The culture shifted from performance and risk to process and inclusion.

Management consultant types filled the board and the top jobs.

They read white papers and spreadsheets and the latest corporate trends instead of watching what actually moves people.

Pricing turned into a crutch. Pushing Air Force 1s up to £120 or £150 quid was habit and nostalgia covering the fact that the brand no longer generated anything new on its own.

When the voice dies all you have left is the markup.

Adidas Got It Right

Adidas showed the other way. It got alternative and retro sports fashion right at a proper premium.

It moved early on padel for example while Nike was still looking the other way. Nike became the brand of the Tech Fleece tracksuit. Not exactly the stuff of ambition.

China is just the most visible version of the same out of touch instinct.

Talking louder about localisation in a soft market will not fix a brand that has lost its edge.

The core consumer still lives in America and still responds to the same thing that always worked.

The promise that greatness is possible if you chase it hard enough.

What Has to Happen

So here is the playbook to fix the company.

Headcount needs to be cut hard. The company is carrying too many people who do not generate elite energy.

The seats and the money go instead to risk takers. People who have played sport at a high level and still play. People who understand competition in their bones.

People who can take a hit from the average and keep going.

Poker players are not a bad secondary test.

They know what downside feels like.

Marketing has to be rebuilt around the same standard. The inclusion first culture ends.

Or at least, include the people who have fire and vision.

There is no soft landing. You kill the rot or it keeps spreading.

Sponsorship needs the same treatment. The individual athlete deal is a worse and worse trade.

Social media gave athletes their own audiences. Plenty of them can already run their own commercial lives. Paying big money for personal endorsements buys less control and more noise.

Shift the weight to places.

Sponsor the stadiums, the high end hotel gyms, the performance gyms, the clubs where the serious people actually train.

Presence in the locations that matter beats another short term face on a billboard.

Produce documentaries, run the Red Bull model of marketing. Just stop being fucking boring and corporate sloppy.

Places and Elite athletes first. Nike as a media brand to encompass this.

Lifestyle soft names last and in most cases not at all. No more ambassadors.

The athlete roster gets the same filter. Grand Slam winners. Major winners in golf. Premier League or World Cup winners. The specific athletes that little boys still dream of becoming.

Ambition and future desire over corporate fashion. Soft lifestyle names leave.

Product follows the same logic.

The over extended lifestyle and inclusion lines that have no real performance core get cut back or killed.

Money moves to the categories that still carry elite vision and to the emerging high spend sports Nike has been late on. Padel is the obvious one right now. The money is there. The moment is there. Nike showed up late. That pattern stops.

Pricing discipline comes back. Using heritage product to pull higher prices while the brand voice is weak is extraction of a dedicated consumer base and I don’t care about the inflation excuse post Covid. Full price realisation has to be earned again through real desire.

China gets operational discipline and not more narrative. Clean the inventory. Tighten the channels. Make the product desirable again. Stop treating a soft market as the main stage while the American consumer base watches the brand lose its edge.

No Gradualism

None of this is gradual. The board and the leadership class that put this culture in place and defended it have already failed. The failure is structural and worse, intended so the next chief executive inherits a clear choice.

If you come from a pure management background you are already the wrong person. If you do not dare to dream you are doomed. If you do not think about the little boy who dreamed of becoming Cristiano Ronaldo or David Beckham you are fucking doomed at Nike 2.0.

The job is not to manage the current culture into slightly better numbers.

The job is to kill the rot completely. Cut the company free from the culture and brand of the last several years. Bring back the elite voice. Hire and promote only the people who still understand competition.

Move faster on cultural moments than the consultants who ran the place before. Stop using secondary markets in structural weakness as the new frontier while the core erodes.

Nike is not a necessity like an iPhone. Apparel and footwear are still a choice. Choices run on desire. Desire runs on aspiration. Aspiration was the original product.

Bring it back or watch the brand keep shrinking. There is no third option.