Nike-Kim Kardashian Partnership Just 'One of a Dozen' Fixes The Brand Needs, Says Footwear Analyst

When the world’s biggest apparel brand partners with one of the world’s most controversial figures, you can guarantee dissenting opinions.  

Nike Inc. NKE announced a partnership with Kim Kardashian’s SKIMS brand on Tuesday, prompting a reception on both sides of the aisle. NikeSKIMS will debut its first collection in Spring 2025, with a global expansion set for 2026. The line will include training apparel, footwear, and accessories. 

Immediately after the announcement, Nike shares gained 6%. 

Nike is at a critical crossroads in its business. With shares down over 26% in the past year, it continues to lose market share to newcomers and is in full turnaround mode. 

The company is working quickly to clean up the mess that previous CEO John Donahoe had made in his failed attempt to make Nike a digital-only brand.  Nike has also failed to connect with female consumers who continue to opt for competitors like Lululemon Athletica Inc (LULU), Vuori, and Alo, among the countless other Instagram native brands. 

A Historic Partnership

Nike’s deal with SKIMS marks the first time in company history that it has launched a new brand with an outside company.  

“The commentary is fascinating, the negative commentary is almost exclusively male, and the positive commentary is almost exclusively female, which says to me that Nike is doing the right thing here,” Matthew Powell, a long-term footwear analyst and founder of Spurwink River, and considered one of the most respected figures in the space. 

Powell said the announcement’s shock caused many dissenters to miscalculate what this partnership is. 

“Many people misread this as a Kim Kardashian influencer story, which is not the story here at all.  The product she built has been extremely well accepted by the consumer. It’s considered a very innovative brand that does not follow the rules of making innerwear. Certainly, her celebrity is bringing eyeballs, but the product is right,” Powell added. 

Still, Kim Kardashian is not coming in to be a savior to Nike, as this is just one of many issues Nike needs to address, according to Powell. Other issues include re-building its relationship with retailers and re-gaining its full-price brand status.

“This is not the only fix that Nike needs; this is one of a dozen fixes that Nike needs.  Some people are trying to couch this as Kim Kardashian would bail Nike out, and that’s not true at all.” 

It may be easy to equate Nike’s new partnership with Adidas’ former deal with Beyonce with its failed Ivy Park collaboration, which ended their four-year deal early in 2023. 

Powell designated a notable difference between the two deals, calling Beyonce’s more of a collaboration than a partnership.

“Adidas and Beyonce could not get on the same page.  Releases were delayed, much smaller than expected, and the whole thing collapsed. It didn’t give Adidas much identity and wasn’t an Adidas-forward product compared to NikeSKIMS. There are some similarities, but I wouldn’t draw a straight line that the Ivy Park failure was indicative that the NikeSKIMS will be a failure.”

Recovering From Donahoe’s Missteps

Powell called the Donahoe era, a former CEO of cloud company ServiceNow Inc (NOW), a complete disaster for the company. During this time, Donahoe focused on growing their DTC business, alienating retailers and pulling out of others, including Designer Brands Inc (DBI)  and Urban Outfitters (URBN).  

Now the brand sets out to repair its relationships with retailers, which many, notably Foot Locker Inc (FL), JD Sports, Hibbett Sports, and to a lesser extent DICK’s Sporting Goods Inc (DKS), are suffering from a Nike flu, says Powell. 

“The things he did were damaging to the brand and are not easily fixable. Their innovation engine was shut down in the Donahoe era.  They have to repair their relationship with retailers, and building back those relationships will take time,” Powell said.

“One former Nike employee who was let go said Donahoe does not respect the brand, he did not respect the product, and he does not respect the people. He had this idea that it would be a totally digital business and would reap all these additional profits, but the industry is not set up to be a (100%) digital business,” Powell explained.

Nike Finds Itself In An Unfamiliar Position

The deal with Kim Kardashian comes at a critical time in the company’s history.  Powell says Nike has never been in this bad shape in the modern era.

“Maybe you go back to the mid-80s when they let Reebok become the number 1 brand in the US, or the sweatshops in Asia and how they handled that was a low point but I would argue this is the lowest point Nike has ever faced,” he said.

“Nike has to figure out the women’s issue. Women’s sport has never been more elevated than it is in the US.  The opportunity for them to capitalize on that is now.  The Super Bowl and the NikeSKIMS are ways of figuring out how to win back women,” said Powell. 

Despite the current negative sentiment surrounding the company, Powell says Nike is still unthreatened as the world’s number one brand. He believes Nike will recover over time and that 2025 will be a better year than the last. 

“While they have massive issues and may never be as dominant as pre-pandemic, they will always be number one.  Nobody is threatening that number one position from them, but they currently have less share than they did five years ago, and I don’t know if Nike will ever get to the market share levels they had before the pandemic.” 

Powell says that new CEO Elliott Hill is the right person to fix Nike’s problems, but it won’t be a quarter-turnaround. 

“A lot of these problems will take years to work out.  He knows that and is trying to tell the stock market that, and of course, the stock market doesn’t like to hear multi-year turnaround stories, and they will continue to get spanked.”

For now, he believes that the Kim Kardashian partnership is a step in the right direction.

“Nike’s women’s business has been a disaster forever.  I think they can learn something here. I think they can gain new female consumers, making Nike a better women’s brand because of this relationship.  I like it on a whole bunch of levels.”

(Photo courtesy of Nike.com)

Disclosure: I have no business relationship with any brands mentioned in this article. I also do not own any shares of any of the companies mentioned in this article.