Nike shares fall Tuesday after the company revealed failed NFL quarterback Colin Kaepernick will be the modern face of the brand. It will get much worse; much worse.
It is only day #1 of the Nike decision to make Colin Kaepernick, and all of the controversy that surrounds him, the brand image of Nike sporting goods apparel; and today the stock dropped over 3%.
However, the current valuation drop doesn’t really tell the full story; because massive investment/branding moves like this are generally projected to increase share value, not lose it. The financial loss is actually much more significant, and only beginning.
There is another problem. Not only is Nike branding themselves based on severe political ideology; and not only is Nike selecting a failed athlete to express that image; and not only has this decision removed well over half of their potential customer base; but Nike has also decided to go much further. Nike will present an entire line of Colin Kaepernick apparel and products. Essentially an apparel line for the Antifa audience.
Details on Kaepernick and #Nike:
– It’s wide endorsement. He’s going to have his own branded line. Shoes, shirts, jerseys, etc. There will be Kaepernick apparel.
– Contract is a “star” deal on par with a top end #NFL player. Millions per year. Star deals also include royalties.
— Charles Robinson (@CharlesRobinson) September 3, 2018
The Kaepernick-Nike product offerings could likely include: hoodies, masks, helmets, gloves and a full line-up of ‘Colin’s Riot Gear‘ for the most discerning combatants amid the social justice community.
From an investment perspective, this means Nike is putting massive amounts of money into a product offering that automatically has removed the top tier purchasers of their products. In essence, Nike has made the fatal mistake in consumer product marketing.
Nike has decided to go from broad-based consumer appeal, to a very niche appeal for the most hard-core political activists who might also wear sporting apparel.
Here is an example of their target audience.
It is stunning that any corporation would make this choice. However, this is a Madison Avenue type pitch that is not uncommon amid the extremist elements of branding and image campaigns. What makes this uncommon is the size of the company willing to accept this type of campaign.
The executive branding decision means if you wear Nike apparel you support cop-killers, Antifa, flag-burners and those who hate the values of the United States of America as expressed through law and order.
The 3% drop in value today is only the beginning. The Nike brand will lose market share because they have branded themselves into a corner from which there is no escape. Trust me, over time – someone, likely a whole bunch of someones, are going to get fired over this.
Facebook, Nike drag Wall Street lower; trade concerns linger https://t.co/PJadZOqyWH
— Reuters (@Reuters) September 4, 2018
NFL’s executive vp of communications and public affairs in a statement: “The social justice issues that Colin and other professional athletes have raised deserve our attention and action.” Read the full statement: https://t.co/uTcmtlNDwM
— The Hollywood Reporter (@THR) September 4, 2018
Nike shares tumbled today amid backlash from its new Colin Kaepernick ad campaign. https://t.co/njgCpaidOD pic.twitter.com/kD7N9Vqwaq
— CNBC (@CNBC) September 4, 2018