Nike basketball sales aren't expected to suffer after cutting ties with Kyrie Irving as anticipation builds for a Ja Morant signature shoe

• Nike on Monday ended its relationship with Kyrie Irving.
• Memphis Grizzlies star Ja Morant is expected to get the next Nike signature shoe.
• Sneaker analyst Chris Burns expects a Morant sneaker to be a hit.

Ja Morant is known for show-stopping highlight-reel dunks. He might be making SportsCenter soon in a pair of sneakers with his name on them.

In the wake of Nike ending its business relationship with Kyrie Irving, anticipation is building that the Memphis Grizzlies star will be the next Nike athlete to get a signature shoe.

"It's happening," said sneaker analyst Chris Burns, who lives in Memphis. "When his signature shoe starts selling, it has the potential to be what Kyrie's was the first three years."

Nike hasn't confirmed that Morant is getting a signature shoe, but NBA reporter Shams Charania on Monday tweeted that one is expected and the "parties have been working on this for several months."

—Shams Charania (@ShamsCharania) December 5, 2022

The anticipated shoe comes as Nike looks to build on the recent success of its GT Cut basketball shoe and remain the dominant force in basketball as rivals Adidas, Puma, and Under Armour look to gain market share.

Adidas, as one example, recently named Bjorn Gulden CEO. He previously worked as chief executive at Puma, where he had success building the company's basketball division.

The Charania tweet followed Nike formally ending its relationship with Brooklyn Nets star Irving.

Nike previously suspended its relationship with Irving after he posted a link to an antisemitic film on Twitter. He subsequently removed the post and apologized.

Nike did not immediately respond to questions from Insider about plans for a Morant shoe, but his electric style of play would boost the company's roster of basketball endorsers with signature shoes, which already includes superstars like LeBron James and Kevin Durant.

"He's the future," Burns said of Morant.

Signature shoes come with risks, including the costs of the deals, the possibility of injury to the endorser, the expense of building high-performance sneakers from the ground up, and the potential for corporate embarrassment if a star misbehaves.

University of Portland marketing professor Ian Parkman, in an email to Insider, said Morant is a top player, but there's a sense among some that endorsements deals are losing some luster given how broadly the images of athletes appear across social media.

"Brands are becoming increasingly wary of direct athlete endorsements," he said. "The media world we now live in makes it much more difficult for firms to control the conversations around the co-brands they create with their athletes. While Ja Morant is a terrific player, we don't know if brands have the ability to leverage him as much as they used to."

Wedbush Securities analyst Tom Nikic told Insider Morant is a "rising superstar" and "there's a gap in the assortment" now that Irving is no longer with Nike, but he also noted, "signature basketball is not nearly as big a part of Nike's business as it used to be."

Still, Burns noted Nike basketball is on the upswing, and Morant has a strong reputation.

The company no longer breaks out the financial performance of its basketball division on financial statements, but when it did in fiscal 2021, Nike reported a 12% annual increase to $1.7 billion.

In its most recent fiscal year, which ended May 31, 2022, Nike's Jordan brand, which makes some performance basketball products and is still broken out on financial statements, reported a 7% sales increase to $5.1 billion, outpacing the brand's 4% top-line growth.

On a June 2022 earnings call, Nike Chief Financial Officer Andy Campion said the company's GT Cut, a more general release sneaker, is the No. 1 product in performance basketball.

The shoe is nearly sold out on Nike's website, suggesting strong demand for performance basketball shoes and room in the market for a new signature shoe.

"Nike basketball has rebounded," Burns said, citing the popularity of the GT Cut. "In the last two years, sales are much better than they have been."

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By: [email protected] (Matthew Kish)
Title: Nike basketball sales aren't expected to suffer after cutting ties with Kyrie Irving as anticipation builds for a Ja Morant signature shoe
Sourced From: www.businessinsider.com/nike-cuts-ties-kyrie-irving-anticipation-ja-morant-signature-shoe-2022-12
Published Date: Tue, 06 Dec 2022 19:06:33 +0000

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