Aishwarya Venugopal and Ananya Mariam Rajesh
(Reuters) – Nike will release new sneakers priced at $100 or less in countries around the world, its chief financial officer said on Thursday, as the sportswear giant adjusts its product lineup in a plan aimed at reviving sales.
Nike (NYSE:) has significantly raised the list price of its top-of-the-line Air Jordan 1 sneakers in recent years. The shoes are currently selling for up to $200 at select retailers, including Nordstrom (NYSE:) on Nike.com.
The top-of-the-line Air Force 1 sneakers, meanwhile, sell for about $150 on Nike’s website. By comparison, rival Adidas’ (OTC:) white-and-black Samba with three stripes and multi-colored Gazelle are priced at $100 and $120, respectively.
Nike shares fell on Friday, ending the day down 19.98%, the biggest one-day percentage drop in the stock’s history. On Thursday, the company reported an unexpected decline in sales in its latest quarter. Nike’s sales growth has slowed as the company battles competition from Adidas as well as brands like On and Deckers Hoka.
Executives also noted a decline in traffic to factory stores that sell discounted shoes and clothing, underscoring the growing pressure felt by high-value consumers.
“This is likely an attempt to protect some more price-sensitive consumers,” said GlobalData analyst Neil Saunders, referring to the new sub-$100 price range. Nike Chief Financial Officer Matthew Friend told investors on Thursday: “Our teams are also pursuing opportunities across price points.” ”
Americans are cautious about their spending, especially when it comes to indulgent or discretionary items such as fashionable sneakers. However, Hoka’s competing Cloudflow 4 and Clifton 9 sneakers, which retail for $159.99 and $145 respectively, have gained popularity among many shoppers lately.
Analysts say Nike’s competitors in the affordable category include Hoca and Roger Federer. “This is an area where they will be better able to compete in the near future,” said Truist Securities analyst Joseph Civello.
Introducing a new Nike line could be a risky move for the company as sales decline deepens.
“It might work to some extent, but it won’t solve the broader problem of a lack of innovation” at Paris Olympics sponsor Nike, Saunders said.
According to Altan Insights, which studies the collectible sneaker market, some key Nike models have recently lost value on the resale market, with the Air Jordan 1 Retro High OG resale price at about a 32% discount as of May.