Aside from the onslaught of designers and brands getting into ath-leisure, Nike recently completed its latest round of cuts to reduce the global workforce by 2 percent. Reebok’s plans to move into new Boston offices with about 675 staffers or 300 fewer than it had earlier this year. Under Armour, which moved about 100 employees into new offices in Portland, Ore., in May, is said to be poaching design and executive talent from local rivals Nike, Adidas and Columbia Sportswear.
In an e-mail exchange, Moore said, “My opinion is this is a very difficult time for the industry but not unexpected. I think it was only logical that Nike would finally get so far ahead of itself that things would start to fall apart. The question is not ‘Why?’ but ‘What are they going to do about it? Their product has been so-so for a few years now and that does not look like it’s going to get much better in the immediate future.”
On the upside, he said Nike appears to be solving the financial part with expanded distribution. “The Amazon deal may be just the beginning for them and Amazon. They believe the direct-to-consumer business is the future and are building toward that, which means traditional marketing types are out,” he said. “I can’t argue about that, but the product side needs attention and not with more and better athletes. No, this time it needs to be with better product from design and innovation. Take a look at the new offerings. They look old, especially from Nike.”
As for what’s ahead, Moore envisions many of the athletic retailers that we know today either disappearing or becoming web only. He also expects the shopping mall concept to change with fewer stores and more food and entertainment. In addition, brands will offer fewer products and their own channel of distribution will be the only one with all of their products. One of Moore’s other prediction is that only three athletic brands will be involved in the endorsement of schools, federations and games. “They will be the only ones that can afford it,” he said.
Moore had a hand in reintroducing Adidas Originals Stan Smiths in 1990. At that time, he and Rob Strasser brought the idea of Originals to Adidas in 1990. With the approval of Michael Michalsky, Erich Stamminger and Hermann Deininger, Originals became a separate division, which they initially called Style. “The division also housed Y-3 and most of the collaborations they have with designers and such. All this was happening since 1991 and many people thought they were nuts. But as it turns out they were right and the market has swung their way and they are enjoying the success.” Moore said, ‘The question is, ‘How long will it last, or what will it evolve into?’”
Moore, who advises Adidas at times, believes the company’s two division strategy will become the standard of the industry and “the final battle may be over a musician versus an athlete.”
From Moore’s standpoint, the overall landscape is changing. “That business is not just direct-to-consumer, but also what you are selling, or making. The majority of the business has always been shoes kids wore as fashion. Those shoes were performance shoes, but today the kid may or may not care about performance, including who’s wearing it. Their concerns are more what it looks like, how much it costs, and who designed it or inspired it. This market shift has been happening for some time, but in the past 24 months it has gained momentum — all of which fit right into Adidas’ business plan.”
Regarding athletic apparel, Moore expects the retro, old-school stuff to run its course. “How many hoodies does one person need? The whole baggy thing is past. Extra-long basketball shorts suddenly look stupid versus stylish. You look at a lot of that stuff and it looks old. So for me appeal is where the blend of fashion, function and style will meet and the outcome will be something different and that will become the next ‘uniform.’ You can see it now in high-end fashion brands. Look at what’s going on at Tory Burch Active.”
Amazed as he was more than five years ago by the social media reach of an influencer that a brand he was consulting with hired, Moore is not convinced they get shoppers to spend. “I must say I was not impressed with their influence when it came to selling products. I think today’s kid doesn’t look to these people to tell them what to wear. We might have been early in the process, but I’m not convinced product endorsement works here,” he said.
From Moore’s standpoint, successful athletic brands are in ath-leisure whether they think so or not. Even a brand like Brooks is in that business, he said. “If you are a $500 million dollar running brand, most of your products are being worn on the street with jeans. There are a lot of those products that are being run in but then they are worn with jeans. That was true in 1984 and it is still the case today. I think there is now almost a category that I will call nonperformance where style is the priority.”
Moore added. “I also believe that the way into this category is still through the 16-year-old kid. It might be through the musician he follows versus the athlete, but it still the kid.”