Nike’s Air Jordan Brand Is Winning Over European Soccer Fans

(Bloomberg Businessweek) -- On a crisp November night in Paris, Kylian Mbappe flashed down the soccer field and passed the ball to his Paris Saint-Germain teammate Neymar, who finished off the run with a crusher into the net. Then the French sensation took the Brazilian hero on his back, and together the two global megastars relished their goal—joined by the image of a third icon, albeit a long-retired one from a different sport: Michael Jordan.

The U.S. basketball legend and his iconic jumpman logo on the jerseys of soccer stars may seem an unlikely pairing, but it's part of a bigger push by Nike Inc. to test new marketing tactics in its perennial battle with Adidas AG—particularly on the latter's European home turf. Nike is diversifying its brand to reach a younger audience and establish a stronger following in European hot spots such as Paris, one of the world's leading fashion hubs, and Berlin, the region's capital of cool.

The “Jordan X PSG” collection, which features hats, jerseys, and other Paris Saint-Germain soccer club paraphernalia, sold out swiftly after its September debut, surprising even Nike leaders. The collection has helped fuel a resurgence in sales for the Jordan brand. In the quarter that ended on Nov. 30, Nike recorded growing sales in Europe, defying a gloomy economic picture for a continent beset by Brexit, Italian political disarray, and yellow vest protests in France. In December, Nike executives said investors should expect further growth in Europe, thanks to new digital marketing tools in London and other cities and hot-selling products like the PSG-Jordan line. On March 21, Nike reported North American results that fell short of expectations, but its sales grew 6 percent in Europe, the Middle East, and Africa for the quarter through the end of February.

“Nike is expressing a vision of the future and executing on it better than anybody I see in retail,” says John Kernan, a New York-based analyst with Cowen Inc. “They're staying close to the consumer. They're driving local trends in key cities.”

Nike's big break comes at the expense of Adidas, which has acknowledged that business at home is tough these days. In its two most recent quarters, the German company recorded falling sales in Europe, which Chief Executive Officer Kasper Rorsted said isn't acceptable when he discussed earnings on March 13. Adidas, he said, has become too reliant on fashion-focused products, losing touch with its historical roots in sports gear. Since 2015 the German giant had enjoyed one of its best runs in seven decades of business, with its stock price quadrupling on demand for retro products that included the 1970s-era Stan Smith tennis shoes and Superstar basketball kicks.

The boom this decade in casual clothing and sporty attire known as “athleisure” helped Adidas narrow the coolness gap with Nike, thanks in part to savvy marketing, such as Gisele Bündchen posing nude, save for her Stan Smiths, in Vogue Paris, Pharrell Williams overseeing the resurgent Superstars, and Kanye West developing his high-priced Yeezy line of sneakers for the company. By 2017, Adidas shocked industry analysts by eclipsing Jordan as the second-hottest-selling brand in U.S. sneakers. Nike's new push into Europe took root in 2017, when the Beaverton, Ore.-based company—reeling from a two-year slump—started rolling out a bevy of best-sellers. The footwear includes the Air VaporMax, the latest overhaul of the air-cushioned sneakers that date to the 1980s; the soft and springy Epic React shoe; and self-lacing kicks. In 2018, Nike had 7 of the 10 hottest U.S. sneakers, according to retail market researcher NPD Group, including the minimalist Tanjun, the Air Max 270, and the Jordan XI “Concord.”

Nike has taken the battle to Berlin. In September it scored a coup at the Berlin Marathon (where Adidas is the anchor sponsor), when Kenya's Eliud Kipchoge smashed the world record by 78 seconds. He crossed the finish line pumping his fists in jubilation and showcasing the Nike Swoosh on his singlet, half-tights, and Zoom Vaporfly shoes. Three months later, Nike sponsored a documentary, screened online, that celebrated Berlin's vibrant nightlife by featuring three dance-club veterans reveling in the city's techno, art, and street culture—and sporting Nike shirts and shoes. In late March the company will release a Berlin-themed Air Max 180 sneaker, with neon colors reminiscent of the lights in techno clubs and a gray upper the company says is a nod to Berlin's concrete postwar buildings. “Just think how painful it is for the Adidas executives to see that,” says Chen Grazutis, a Bloomberg Intelligence analyst. “It'd be like Adidas starting to put videos out saying how Portland is cool. It's a little odd. But when Nike does it, it doesn't look that weird.”

Adidas, of course, isn't standing still. The company is promoting a new line of shoes and apparel partly made with recycled plastic pulled from beaches and oceans to raise awareness of pollution around the world. The material is also threaded into German soccer powerhouse FC Bayern's jerseys for Champions League games.

It's possible that in coming years a squad of FC Bayern players in Adidas's ocean-plastic uniforms will square off against a team of PSG stars wearing the image of Michael Jordan. Adidas CEO Rorsted would be rooting for Bayern but not without some envy. Asked if there's one athlete in the world he'd most like to see wearing Adidas, the CEO had a quick response: “Mbappe. He's a great player. He has speed. He has personality.” And Nike is his sponsor.

To contact the editor responsible for this story: Dimitra Kessenides at dkessenides1@bloomberg.net

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