Apparel and footwear company Nike Inc NKE is one of the best-known brands in the world. The company completed an IPO in 1980 and has been publicly traded since.
Here’s a look at a key event in the company’s history that helped Nike’s future and how it helped investors along the way.
What Happened: From 1972 to 1984, Nike’s sales increased from $3 million to $919 million. The company saw a strong run of success as customers flocked to the company’s shoes and apparel.
Trends changed in 1984 and the company had its first earnings decline. Earnings dropped 29% in fiscal 1984. Two quarters in 1985 saw the company post its first-ever losses.
Things changed after the company signed Michael Jordan, who had just won an NCAA Championship at the University of North Carolina, to an endorsement deal.
The deal with Jordan came at a risk for Nike as it offered to name a shoe after him and pay out royalties alongside the normal contract.
On April 1, 1985, Nike released Air Jordan shoes in six cities. The shoes quickly became a top seller for the footwear company.
Jordan wore the shoes in NBA games, despite getting fined by the league for not meeting a policy on uniforms and shoe colors. Nike happily paid the fine and enjoyed huge attention for its new product.
The marketing from Jordan wearing the shoes and commercials including the famous “Who said man was not meant to fly” ad featuring Jordan soaring above the rim helped push the demand for the shoes.
Over $55 million in Air Jordans had sold by mid-June 1995.
Today, Air Jordan has endorsement deals with colleges, soccer teams and individual NBA athletes and is one of the top brands in the company’s portfolio.
Jordan made $1.8 billion from his Nike deal and the company has enjoyed strong returns along the way.
The story of signing Jordan to a Nike deal became a major motion picture from Amazon.com, Inc. AMZN titled "Air," starring Ben Affleck, Matt Damon and Viola Davis.
Related Link: Nike Q4 Earnings Highlights: Revenue Beat, EPS Miss, China Sales, Inventory Update And More
Investing $1,000 in Nike: With Nike struggling in 1985, investors may have headed for the exits as other competitors were taking market share and seeing leads in sports outside of running.
Investors could have seen an investment opportunity when Nike signed Jordan, the third pick in the 1984 NBA Draft and highly touted prospect.
Shares of Nike traded at a split-adjusted price of 14 cents per share on April 1, 1985. A $1,000 investment in Nike stock at the time could have purchased the equivalent of 7,142.86 shares of NKE.
Those shares would be worth $791,143.17 today based on a share price of $110.76 for Nike at the time of writing.
While not every new product or partnership announced by a company will be life-changing such as signing Jordan, an all-time NBA great, investors can look for opportunities that could transform companies.
Read Next: Michael Jordan Gave Ben Affleck 2 Demands To Secure His Blessing On "Air" Movie
Photo: Michael Jordan, sneaker via Shutterstock; Logo via Nike
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