Background: Nike has been one of America's biggest sportswear names for decades. After starting as Blue Ribbon Sports in 1964, the company rebranded as Nike in 1971 and joined the S&P 100 in 2008. But the brand's recent run has been anything but victorious. Nike shares have fallen from a 2021 peak of around US$179 to about US$38.40, wiping roughly US$230 billion from its peak market value.  

What happened: That decline has now cost Nike its spot in the S&P 100, with Dow Jones Indices set to remove the sportswear giant from the index by the end of September. Analysts reckon Nike's fall from grace stems from the sportswear giant pulling products from hundreds of retail stores in 2020 to shift its focus towards more profitable direct sales.

What else: Going direct may have improved Nike's margins per shoe, but it also left valuable retail space open for competitors to move into. And once those alternatives were on the shelves, winning customers back became a much bigger challenge.    

What's the key learning?

💡 When you abandon longstanding retail and distribution partnerships, you leave the door wide open to competition filling the void.

💡 Nike once made up 75% of Foot Locker's revenue in 2017. But after Nike pulled its sneakers from the retailer, Foot Locker had to find other brands to fill the massive gap, giving competitors like On Running and HOKA a big opportunity.

💡 On Running and HOKA's combined revenue grew from $682 million in 2017 to $3.2 billion in 2025 after filling the retail space Nike left behind. Basically, customers walked into the store looking for Nike and had a new option sitting right in front of them.