Although Nike still ranks as the number one sportswear company in the U.S., it has faced many financial struggles over the last few quarters, risking losing its spot to emerging activewear brands that resonate better with today's society and consumers' needs.
In its latest conference call, Nike discussed its new strategy to return its business back to profitability. It said it plans to promote growth in its apparel sector by segmenting its business based on gender to better assess the needs of specific customers.
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According to Nike's second-quarter earnings report for fiscal 2025, total revenues declined by 8% compared to the year prior, with North American sales down 8%.
"The approach enables the teams to identify new opportunities, fuel innovation, and drive incremental growth by sport and gender. Breadth and depth, and how we orchestrate our complete product portfolio have always been strengths of NIKE," said Nike CEO Elliott Hill.
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Although apparel is not its weakest sector, and the company has shown some improvement since the previous quarter, total revenues in the apparel sector were still down 9% for the six months ended Nov. 30, 2024, with a 4% decline in its North American market.
Nike partners with SKIMS to launch a new brand for women
On Tuesday, Nike announced it had joined forces with SKIMS to create a new brand called NikeSKIMS. This brand will focus on body-fitting activewear for women, including apparel, footwear, and accessories.
SKIMS is an American shapewear and clothing brand created by businesswoman and reality TV star Kim Kardashian. This brand aims to promote body positivity and inclusivity among women.
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According to Nike, NikeSKIMS merges Nike’s advanced innovation, sports science, and athlete insights with SKIMS’s signature style, female form knowledge, and body-inclusive solutions.
This new partnership aims to grow Nike's women's business by better catering to female athletes and fitness enthusiasts through SKIM's specialized knowledge.
“This partnership brings together the best of both brands and unlocks an incredible opportunity to disrupt the industry with our shared passion and commitment to innovation," said Nike President of Consumer, Product, and Brand Heidi O’Neill. "We will invite even more athletes into sport and movement with product that makes them feel strong and sexy,” she added.
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SKIMS seems to be the perfect partner to kickstart Nike's growth strategy in the women's sector since it has grown impressively fast.
In less than six years since its inception, SKIMS is estimated to be worth over $4 billion and generated $750 million in sales as of 2023.
SKIMS attributes its immense growth partly to its savvy social media marketing and campaigns featuring prominent pop culture figures. The brand has also collaborated with renowned brands such as Dolce&Gabbana, Swarovski, and The North Face to develop iconic limited-edition lines and expand its brand's awareness.
The first NikeSKIMS collection will debut in the U.S. this Spring and be available at select retail locations and online at nike.com/NikeSKIMS. Next year, the new brand will expand globally to new markets, retail locations, and wholesale partners.
SKIMS' success record with activewear and athlete campaigns
Although activewear is not SKIMS' main focus, it's no stranger to closing deals with athletes as it has launched successful campaigns with Team USA for the Olympics and has multi-year partnerships with the NBA, WNBA, and USA Basketball.
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In December, SKIMS also partnered with The North Face, an outdoor apparel brand, to create a stylish skiwear line that features outerwear, base layers, apparel, and accessories in SKIMS' signature color palette of various nude hues.
The North Face x SKIMS line was so successful that only minutes after its launch, most of this collection sold out, which was to be expected since that seems to be the norm for nearly all SKIMS drops and collaborations.
The brand's pristine record is a very good signal for Nike since the odds of the NikeSKIMS brand becoming successful seem pretty good.
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