Nike in a tricky situation: partnership with Kim Kardashian to bring about a turnaround

Nike is in a difficult situation. Sales are down, the stock has lost more than a quarter of its value in the past year and the new CEO faces the challenge of reviving the aging sports giant. Now comes unexpected help - Kim Kardashian.

Nike $NKEexecutives announced a collaboration with Kim Kardashian on a new brand called NikeSkims. Inspired by the successful Skims line of shapewear, the collection is set to "revolutionize the global fitness and sportswear market with innovations that serve all female athletes," according to the official press release.

Specific details, including pricing and product looks, have not yet been released. The brand will first launch this spring in select stores and online in the US, with a global launch planned for 2026.

The move is unique for Nike - until now, the company has never created a new brand in collaboration with an outside entity. Rather, it has relied on acquisitions or collaborations with popular athletes such as Michael Jordan.

Nike said that Skims initially proposed only a joint product line, but then decided to go bigger - creating an entirely new brand. NikeSkims will include a wide range of training apparel, footwear and accessories, aiming to set a new standard in the sports fashion segment.

According to analyst Neil Saunders of GlobalData Retail, the collaboration could help Nike regain relevance in the activewear space, where it has lagged behind competitors such as Lululemon and Alo in recent years. "While Nike has the skills to build its own women's fashion brand, it is losing the ability to tell stories, innovate and appeal to customers. Partnering with Skims will help to remedy these shortcomings," Saunders told CNN.

While Nike is facing declining sales and stiff competition from new brands like Hoka and On, Skims is enjoying tremendous success. Kim Kardashian's company was estimated to be worth $4 billion in July 2023. Originally focused on shaping underwear for women, it is now expanding into the men's market and has partnered with the NBA, WNBA and Team USA for the Olympics.

Nike, meanwhile, is struggling to adapt to changing consumer trends. Increasingly, consumers are favouring experiences such as concerts and travel over expensive sportswear. The company recently replaced its CEO and is looking for ways to return to the top.

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Source: CNN