Issue No. 36: DNVB’s, Budweiser, BigCommerce, $ADS v $UA

A LAST WORD: UNDERSTANDING THE SHOE WARS

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Steph Curry is the NBA’s first ever unanimous MVP. His Under Armour shoe is also out-selling Nike’s top draw by a cool 10 million, in the last year. But it’s not all roses for Under Armour, right now. The potential trouble with their consumer strategy is that they have hired athletes who were once considered long shots. When the athletes continue to ascend, the brand climbs. When the athletes temporarily level off, the stock price falls. Leveling off can mean: Steph Curry losing to the Trailblazers or Spieth falling to a challenger at The Master’s.

For the first time in sports brand history, athlete performance directly correlates to stock performance. LeBron could lose the NBA title and Nike’s stock wouldn’t budge, his popularity and charisma sells shoes. For Curry, Spieth and others, their ascension sells shoes.

The stock is trading at +1.3% at press time and articles like these are circulating.

The Under Armour ($UA) brand once used a brand motto once established in 2010 that communicated today’s strategy: that they were gaining on their industry competitors. The entrance into the shoe industry was a spirited: “click clack, you can hear us coming” ad series. Adidas is another brand attempting regain North American market share by employing new tactics to energize dormant loyalists while attracting new ones.

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Adidas took an altogether different approach to increasing its market cap by $9B since May of 2015. For instance, Kanye West can publicly fail and sales will only grow. Sales are clearly not attributed to West’s performance. Rather, the product is the focus. Kanye has personally designed a shoe that has an outlier asset price position. His designs have done so well that many of Adidas’ other shoes reflect his signature appearance.

The addition of Kanye West as a charismatic design influencer and personality has revived the brand. The brand is resurgent, with a new canvas for innovative athletic / streetwear designs that are derivatives of Kanye’s “Yeezy Boost” series. Adidas stock is trading at a five year high.

Under Armour is a brand that is continuing its climb, chipping away at Nike’s market share along with Adidas’ surprising resurgence. Both market strategies were risky but one of them seems more sustainable.

Read on: Why Under Armour Should Fear Adidas

See more of the issue here.

 

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