Nike facing major value decline on stock market

0:00brands have lost their way. I read this last night but Nike which is listed on the, I think it's the New York Stock Exchange in the last five years has lost 80% of its value. Now Nike pretty much invented the modern day running shit back in the early 1970s and they've got the famous swish logo and we're leaving the brand. I mean growing up we'll say Nike in Australia but apparently it's Nike although in the original Greek I think it'd be Nick Keh. Anyway. Other brands, Coke in the 80s, got it wrong with new Coke. People wanted the old Coke back. The new one tasted a bit different. Lulu Lemon which an old friend of mine ran here in Australia for a while. They were the Athlesia brand for quite a few years. A peter have fallen away now. It's spree. I hadn't seen them before from a listener Tony who pointed out that Jaguar, the car brand last year, had that ridiculous ad that had people wearing strange colors in this. It didn't feature any cars. In fact Jaguar doesn't even have any new cars at the moment. It's sort of a car brand without cars.

1:02Brands that lose their way. An ex-case consumer expert and associate professor at Griffith University Graham Hughes. Good morning. Good morning. Well I don't know how much you know about Nike but some people say they've lost sight of making shoes which are actually good to running and they're worried more about colors and association with celebrities and that sort of thing. Do you think that's right? Look I think that the whole Nike position is a really interesting one and it's a wonderful case day to actually look at. Essentially what happened with Nike is they went try to go direct to consumer and cut out the middlemen so to speak. So those relationships with a lot of those stores were something that they didn't when investing as heavily into and of course those needed stocks. So he had new up and coming as like Hoker and on cloud which stepped into that space and retailers just need to sell products and unfortunately Nike missed out. It's interesting because

2:05friend of mine he does you know marathons and Iron Man triathlons. He swears by Hoker or Hoker shoes. He says that they are absolutely the best things to run in and I think Roger Federer, the X10's player he invested in the is it O-end that other brand that you mentioned? Correct. Yes. So it's I mean with choice I mean us as consumers we go into store and yes there's some brand loyalty but of course there's a number of different things that come into into the mix you know when you're going to to try a new running shoe and so we've got more access than ever before. There's new ways of manufacturing and so we're getting market, product to market faster than we we ever have and because Nike is sort of stepped out of the position in some of those stores there was an opportunity there and some of those other brands have certainly come in and filled that void. Yeah and look I worked for that for four years at country road in the mid 90s and I've never been about 1994 you know the brand which is

3:10always being very conservative and you know appealing to women of a certain age and sticking with Navy and Black and Grey and that sort of thing. Suddenly the women's wear range everything was lime green and bright orange like like a highlight pack and you know none of the country road customers wanted to wear those colors and in fact and and we had massive amounts of unsolved inventory we just couldn't give it away that we just got it wrong one year and it cost us I think tens of millions of dollars in lost profits. Absolutely and that's the struggle I mean for many businesses is do they continue that journey with with that demographic as they age and mature in their lives or do they continue to reinvent themselves in the zone that they were originally known for and it's this difficult struggle to know you know what you should do because you're going to end up upsetting those loyal customers have shocked with you for 10 20 30 years but of course over time they spend less and they unfortunately then do move on and you've got

4:16the new who up and coming generations who have you know larger disposable incomes and you want to cap into that so there's a difficult balancing act that many businesses have to go through. Yeah or I think it's fine Graham Hughes there consumer expert from Griffith uni and there's another one I mean again growing up in the 80s as I did the Australian surfwear brands were a sentence you know quick silver rip cool and bill of ball and they did really well for a while overseas but what happened over the next 30 years is that the next generation didn't want to wear the same gear that their dads wore and it was mainly their dads back then so you know they still appeared appealed to guys in their 40s and 50s but younger guys in their 20s didn't want to be seen in the same stuff.