For Nike, ‘it’s gotta be the shoes’ is a thing of the past

investing.com:

By Katherine Masters and Ananya Mariam Rajesh

(Reuters) -Nike has increasingly leaned on its iconic basketball shoes to boost sales, but as the sportswear giant bleeds market share to newer brands, some analysts and investors are wondering if that is a mistake.

Shares of the retailer were down 5.6% in extended trading on Thursday after a post-earnings conference call in which executives acknowledged Nike (NYSE:NKE) had lost share in running shoes, a category that has surged in popularity over the last year.

Nike CFO Matt Friend told investors the company was cutting back on supplies of «classic» shoes, including the company's Air Force 1 sneakers, to focus on upcoming launches and new product development.

The move is a major shift for Nike compared to five years ago when basketball shoes from the Jordan brand and court-inspired styles such as the Air Force 1 and Nike Dunk drove the company's sneaker sales. However, consumers have new favorites in the market like On and Deckers-owned Hoka, which have grabbed more shelf space globally.

«If we do a post-mortem, maybe there’s been too much reliance on legacy or historical product,» said Jim Tierney, chief investment officer of Concentrated US Growth Equities at AllianceBernstein (NYSE:AB), which owns Nike shares. 

Nike Air Jordan shoes, first produced for U.S. basketball star Michael Jordan during his time with the Chicago Bulls, were released in 1985. The sneakers soon became a global craze thanks in part to ads featuring Jordan and filmmaker Spike Lee with the tagline «It's gotta be the shoes.»    

Data from analytics firm Altan Insights, which studies the collectible sneaker market, shows that Nike doubled the number of Air Jordan 1 Highs released through its SNKRS app