back to HOT News

Nike, Under Amour and Their Overall Affect on the Business World

by: Rich Salvatori - posted on: 31-Oct-2013

Business executives all over America are in a never ending effort to discover the quickest, fastest and most efficient ways of achieving market share and improving margins.

A big piece to that puzzle is to understand competitors and their philosophies. But the nature of who you are competing with is ever changing, and that is more apparent in the fashion and retail game as opposed to anywhere else.

A high profile meeting of business minds within these industries recently took place in New York City. While the parties were there to primarily discuss apparel as it applies to certain high-end and well respected business groups, they also made serious mentioned of a newfound issue quickly attacking their bottom line: Nike and Under Armour.

Products such as socks, underwear and undershirts are products worn by the average businessman in any city. For years, a variety of market inhabitants had dominated this platform. Athletic-wear businesses were never viewed as threats, but that is changing now.

“National” brands are giving way to “designer” brands, and “sport” is quickly trending upward when it comes to secondary fashion items.

Sure, you can’t wear a Nike t-shirt to a professional job in most cases, but you can wear their socks to almost any occasion. The same can be said for Under Armour, and the overall market influence being exerted on buyers is coming from all angles.

Nike has placed their “Elite” socks on many a college basketball program. They have also created the “Vector” sock for collegiate football, and it too has been a hit.

Seeing these items on television has influenced individuals in the work force (albeit mostly from the younger age groups) to use the multi-purpose wear on many an occasion. Why wear conservative dress socks to work when you can grab a pair of Nikes and simply leave them on before hitting the gym at 5:30?

Does the influence of the aforementioned athletic wear companies stretch to all fashion areas? It certainly does not. But, still, Nike and Under Armour are up around 70% and 100% respectively in the previously described, secondary fashion categories.

So many mainstream fashion groups have attempted to create what is perceived as a “lifestyle” brand. While some have certainly been successful, no one is doing it easier than Nike and Under Armour. Yes, both are profiting from the increase in popularity regarding the “cross-fit,” generation. Working out is no longer a hobby, but is now a true lifestyle.

You see business professionals shelling out thousands of dollars a year to join gyms and receive personal training, and those numbers have steadily increased for over a decade. The “sport” of working out is now a 24/7 approach that translates to treadmills, in ground pools, triathlon competition and gyms being built at workplaces.

Being at work and being at the gym are synonymous to an extent, and this trend is wreaking havoc on mainstream fashion and apparel companies.

I doubt this is what Phil Knight had in mind when he first created Nike. Perhaps he foresaw such a trend, but it’s difficult to predict. Either way, the evidence of such change is abundant. Nike and Under Armour are no longer taking aim at Adidas and Reebok, but they are instead challenging any potential retailer in their path.

One executive made mention that Nike “tends to add gas to the fire with some ideas.” That has to be the effect of a media driven era in which the consumption of sport has taken on a new meaning. Schools recruit players with fashion, and consumers are taking note.

I don’t expect this to change any time soon. Under Armour has the potential to take itself to Nike’s level or at least into the vicinity. While they have made good on the promise to investors of sustaining profitably, they are beginning to do it in a manner that is affecting other industries.

It’s quite rare for such a development to occur. Perhaps the best comparison would be Apple and their influence not only within the computer game, but also electronic and media-based devices in general.

Oregon has perhaps the best football program in America behind Alabama. They also have, by far, the best features within any athletic program. Money talks, and it is speaking quite loudly right now in certain parts of the country. This is a dynamic that should continue to progress for some time, and it will be interesting to monitor moving forward.