Nike is collapsing. Yes it went woke, but that’s not why it’s going broke

This week there’s been era-defining upheaval in the capitalist cultural zeitgeist: sportswear icon and behemoth Nike has suffered such a loss in market value it’s set to crash out of the top 100 companies on the US stockmarket. To which I say – good.

The corporate megalodon has lost more than $US200 billion ($277 billion) in value since its record high of 2021 – a share price rout of nearly 80 per cent that one investment newsletter dubbed “a collapse for the history books”. It was worth about $US280 billion, it is now less than $US60 billion.

Some people have eagerly sheeted the disaster home to the company’s controversial embrace of plus size, trans and woke values. This is false.

But I am celebrating. My animosity to the brand was hardened by Nike’s decades of ruthless, macho alpha corporate culture – famously paying the designer of its iconic Swoosh logo just $US35; the allegations of Asian sweatshops; child labour; tax avoidance, “technology doping” at the Tokyo Olympics (guidelines were changed after Nike’s Vaporfly shoe was found to boost performance). Oh, and the company infuriated The Beatles by using John Lennon’s anthem Revolution in an ad campaign against the surviving band members’ wishes.

But I am really celebrating because I have harboured an intense dislike of Nike ever since schoolyard taste arbiters told junior me that Nike and its win-at-all-costs ethos was to be lauded, embraced and, above all, purchased.

Frankly, Just Do It and 1980s American cultural imperialism never inspired me. Besides, what’s wrong with Dunlop Volleys? I am proud to this day that I have never made any Nike purchases.

To be fair, it is incredible that when Nike was formed in the 1960s, jogging as a leisure pursuit did not exist. Running was for serious track and field athletes only. Co-founder Bill Bowerman brought jogging to the States from New Zealand, of all places, and helped cement jogging (and Nike) in the global fitness boom. When Forrest Gump ran across America and through 1970s history in the film, he ran in a pair of Nike red, white and blue Cortez.

The film Air starring Ben Affleck tells the story of how the firm hired nascent basketball star Michael Jordan in 1984 – Jordan preferred Adidas and Converse – and changed sports marketing, cementing the popularity of sneakers globally.

However, the excellent business podcast Acquired’s special episode on Nike details how the company masculine arrogance meant it missed the 1980s aerobics boom, which Reebok sales topped.

Cultural warriors point to the downfall beginning in 2018, when the company launched ads featuring former quarterback Colin Kaepernick, who had kneeled during the US anthem. This was bold and visionary – and got up a lot of people’s noses. Nike stock fell but sales rose and the campaign dominated the discourse for weeks.

But just six months earlier, Nike had been engulfed in a massive MeToo scandal, when female employees complained about harassment and sexism after years of inaction. It forced a massive executive exodus. A year later, Nike’s elite running group the Nike Oregon Project fell apart after separate doping and abuse scandals.

While some said the price collapse was a result of woke ad campaigns using trans-identifying influencers who were born biological males to sell women’s apparel, angering women campaigning to protect women’s sport, the stock fall had more to do with over-reliance on online distribution over retail sales, Trump tariffs affecting imports from its Asian factories, and a big drop-off in the Chinese market.

After Nike pulled back on retail sales, newer brands such as New Balance, Arc’teryx and HOKA took up the shelf space. So did On Running, backed by former tennis star Roger Federer, who invested in the brand after dumping Nike when it threatened to cut his endorsement deal. Adidas might be considered cooler, it is still half Nike’s size.

And while the shareholders don’t like Nike, huge swaths of the public still do. On Friday the Los Angeles Rams and San Francisco 49ers take to the Melbourne Cricket Ground for the first National Football League competition match played in Australia, they will do so in Nike supplied uniforms, (for which the apparel brand pays a reported $US200 million each year for the privilege).

As the company’s bosses look hopefully towards a reset and revival, it’s worth considering that only a brand of Nike’s size and strength could do a deal like that. And as it looks to the future, it still has about 500 million people use its mobile apps for shopping, fitness and running club. I am just not one of them.

Stephen Brook is The Age’s special correspondent.

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