Nike’s Mbappé coup
These are trying times for Nike. A stock market slide has taken the company’s market capitalisation down to just $54bn from a high of around $280bn at the height of the pandemic in 2021. A prolonged downturn in sales — especially in China — continues to weigh on the company’s stock and earnings. The growth of rivals both in China and international markets in core areas including running and basketball has eroded the US giant’s market share.
This week Nike suffered another significant blow as one of its stars jumped ship for an upstart. On, the Swiss running shoe brand, announced on Friday that it had bagged Kylian Mbappé to spearhead its push into football. Nike had been the French forward’s sponsor since he was a child. Thierry Henry, another longtime Nike ambassador, has also joined On as its director of football.
For On, signing Mbappé is a major coup. Its move into football follows a similar expansion from its core running business into tennis. Roger Federer himself is a backer of the company, which makes his signature shoe, “The Roger”.
But it also speaks to an emerging trend of sports stars choosing challenger brands over being part of a big stable of athletes. Earlier this year Steph Curry signed a monster endorsement deal with China’s Li Ning, while England captain Harry Kane (another former Nike partner) wears Skechers football boots. New Balance has a small roster of top athletes including tennis player Coco Gauff and Japanese baseball star Shohei Ohtani.
Losing its football talisman will add to the pressure on Nike and its CEO Elliott Hill, who was brought out of retirement in 2024 to help turn the company around. You can read our interview with him from the summer, in which he admitted his plan was taking longer than hoped to bear fruit.
What’s more galling is that football, specifically, was meant to be the next big engine of recovery. Mbappé himself was the frontman of Nike’s “Rip the Script” World Cup ad campaign.
To help, Nike has turned to Alexandre Arnault — the 34-year-old scion of the LVMH dynasty — who joined the board this week. The company hopes his experience at Rimowa, Moët Hennessy and Tiffany will help, with one person familiar with the discussions lauding his expertise as a “turnaround expert” with extensive understanding of consumer trends and global brands.
It’s worth noting that On’s share price is not exactly racing. While the Mbappé news briefly boosted the US-listed stock by 7 per cent on Friday, it is still down around 40 per cent this year. The sportswear business is not in rude health generally, as the post-pandemic boom in athleisure wear subsides. Football is a tough, crowded market, and with this foray On gets further away from its original mission to be a specialist in high-end running.
Still, it’s easier to turn around a speedboat than a supertanker.