Throughout the company’s earnings call on Thursday, Nike president and CEO John Donahoe offered several insights into the health of its basketball business. While delivering a long list of accolades, the executive also confirmed Nike would soon relaunch NBA icon Kobe Bryant‘s brand.
The Kobe brand relaunch, Donahoe stated, would take place in advance of Kobe Day on August 24. (The date represents the two jersey numbers Bryant wore during his NBA career.)
Although details of what the relaunch will include were sparse, the announcement was enough to get both industry insiders and fans of the Nike Kobe sneaker franchise talking.
Matt Powell, an advisor at Spurwink River consultancy, offered a bit of Nike Kobe sneaker history to FN, and detailed the shift in consumer behavior following Bryant’s untimely and tragic death from a helicopter crash in February 2020.
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“It’s important to understand that before Kobe died, his shoes were not that popular here in the U.S. They were wildly popular in Asia, but not popular here,” Powell told FN. “After he passed, the opportunists out there thought they could get a shoe that would have high value because they weren’t going to make any more of them and people commemorating his life would pay a high multiple.”
Darryl Glover, famed collector whose collection is dominated Nike Kobe styles, has confirmed this massive shift in a fan’s ability — or inability — to purchase the styles at retail.
“Prior to 2020, I could generally get my hands on every Kobe release. Now, it has been nearly impossible,” Glover said. “With the help family and friends, I have been able to get my hands on few pairs, but without them I would have been unsuccessful.”
Not long after the athlete’s death, his wife Vanessa Bryant publicly expressed a desire for his fans to have more access to his Nike shoes. Specifically, she addressed this on Instagram Stories in December 2020 following the launch of the Nike Kobe 6 Protro “Grinch.”
In the time since, the contractual agreement between Nike and Kobe Bryant came to an end in April 2021, and a new partnership between Nike and Vanessa Bryant was announced in March 2022.
With the upcoming relaunch, although the Bryant family had once called for better access, Glover isn’t confident Nike will deviate far from its scarcity model when it comes to the athlete’s shoe releases.
“Considering those who were not historically Kobe fans might now want his sneakers because of the legacy and wanting to be associated with that, I don’t anticipate an increase in availability because that scarcity model is what drives sales,” Glover said. “From a typical and general business standpoint, making more sneakers could be a risk for Nike. No company wants leftover inventory or product that will then need to be discounted, but I don’t think that would be the case with Kobes.”
He continued, “Even if they do make Kobes slightly more available, it still has to make business sense for the company. I’m sure they don’t want an iconic shoe in a discount or outlet store.”
Powell disagrees.
“It was very clear from yesterday’s call that Nike is scrambling here for business. Their business is not good and they’re trying to figure out a way to right that ship,” Powell said. “I have a feeling they’re going to put a lot of pairs of shoes in the marketplace.”
He continued, “The popularity of shoes is driven by the sense that, ‘I’m going to be able to make a lot of money here. I’m going to be able to buy a shoe at retail and flip it for much more than I paid for it.’ All of that is always based on scarcity. If Nike now starts producing big numbers — and we don’t know that from [Donahoe’s] commentary — but if they do start producing big numbers, this shoe could fall out of popularity very quickly.”
This strategy, according to Powell, could eventually prove costly.
“It’s exactly the wrong thing to do here in terms of sustainable long-term business,” Powell said. “If they kept the quantities relatively tight, I think it would keep consumer interest up, it would help support the resale market and this shoe could go on for a while. If they put a lot of pairs in the market, if the kid isn’t going to be able to get the multiple on the resale price, I think interest will wane very quickly.”
When Nike reported its fourth-quarter earnings for fiscal 2023 on Thursday, the company missed expectations. The athletic giant reported Q4 revenues of $12.8 billion, up 5 percent compared to 2022. For the full year, revenues were $51.2 billion, up 10 percent over the prior year.
