Nike is in a slump. It’s hired Kim Kardashian to help

New York (CNN) — Nike is in a slump. Sales are down, its stock has lost more than a quarter of its value over the past year and its new CEO needs some help turning around the aging athletic company. Enter Kim Kardashian.

Nike is partnering with Kardashian for a new brand called “NikeSkims,” the company and fashion mogul jointly announced Tuesday. The collection, which is based on her popular shapewear line, “will disrupt the global fitness and activewear industry with best-in-class innovation in service of all women athletes,” according to a press release.

Few details were initially made available, including pricing and images. However, the brand will first roll out in the United States this spring online and at “select retail locations,” with a global launch planned in 2026.

The new collection is a first for Nike, which hasn’t partnered with an outside company before to create a new brand, rather relying on acquisitions or tapping popular athletes (i.e. Michael Jordan) for apparel. Financial terms of the brand wasn’t revealed.

Nike said that Skims “proposed a shared product line,” but suggested “something even bigger,” thus the creation of NikeSkims. “More than a partnership, the new brand will set a new standard in the global fitness and activewear industry with an extensive line of training apparel, footwear and accessories,” the press release stated.

The new brand will help Nike be more relevant in the activewear category, helping it compete against Lululemon and Alo, which is an area “where it has been flagging and playing second fiddle,” according to Neil Saunders, retail analyst and managing director at GlobalData Retail.

“In theory, Nike should have all the skills needed to drive its own brand in womenswear, but the reality is it has lost some of its ability to story tell, innovate and wow consumers,” Saunders told CNN. “Partnering with Skims remedies some of those weaknesses.”

Skims has been a major success story for Kardashian with the privately held company valued at a whopping $4 billion as of July 2023. The brand is aimed at everyday wear expanding beyond women with a men’s lineup and inking sponsorships with the NBA, WNBA and Team USA for the most recent Olympics in Paris.

Meanwhile, Nike faces tough competition from upstart running brands like Hoka and On. Plus, customers are changing their behavior, passing up discretionary purchases of expensive sneakers and athletic clothing for basics and experiences such as concerts and travel. Nike recently changed CEOs to help turn it around.

Nike (NKE) reported an 8% drop in sales in its most recent quarter, signaling the company is still struggling. However, shares perked up following the Kardashian news — rising nearly 3% — in early trading. Meanwhile, Lululemon (LULU) shares fell nearly the same amount.

The-CNN-Wire
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