B2 Nike (ours)

The decline of a giant 0:00

0:00For half a century, Nike was the name every other sneaker brand got measured against. In November 2021, the company was worth more than $260 billion, and its swoosh was on the jersey of every NBA team.

0:14Not anymore. On September 21st, 2026, Nike was removed from the S&P 100, an index of 100 of America's biggest blue-chip companies, after about 18 years inside it. The open spots went to tech firms, one of them a memory chip maker. The week the move was announced, Nike was worth about $57 billion. Put another way: for every $5 Nike was worth in 2021, about $1 is left.

0:40That same month, Kylian Mbappé, who signed with Nike at 8 years old, left after 20 years for a Swiss sportswear brand. Ten days after the exit, Nike warned its sales would shrink all year and announced more job cuts.

0:56So how did it come to this? How does a company named after the Greek goddess of victory end up losing like this? To answer that, we have to watch Nike rise before we watch it fall.

1:10And the rise is a great story. In the early 1960s, German running shoes, from brands like Adidas and Puma, were on the rise in America: well made, and expensive. Nike did not start as a giant. It started as a question in a student's homework.

The rise of the underdog 1:28

1:28At Stanford, a business student and former college runner named Phil Knight wrote a paper around one bold question: "Can Japanese sports shoes do to German sports shoes what Japanese cameras did to German cameras?" He got an A. Then he couldn't let the idea go.

1:45On January 25th, 1964, Knight and his old track coach, Bill Bowerman, shook hands over lunch in Portland, Oregon. Each put in $500, and Blue Ribbon Sports was born. They imported Japanese running shoes called Onitsuka Tigers, and Knight sold them out of the back of his car at high school track meets, while still working as an accountant.

2:08The real break came from a fight with that supplier. By 1971 the deal with Onitsuka was falling apart, and Knight needed his own brand, fast. He asked a Portland State design student, Carolyn Davidson, for a logo that showed motion and did not look like Adidas. She brought him a curvy checkmark. His verdict, as The Oregonian later reported: "Well, I don't love it, but maybe it will grow on me." She billed him $35. At the $2 an hour he paid her for charts, that's about 17 and a half hours of work, and she says it was more, for one of the most recognized logos on Earth.

2:49Knight wanted to call the new brand Dimension 6. His first employee, Jeff Johnson, suggested Nike instead. In 1972, Bowerman shaped rubber in his wife's waffle iron and invented a grippier sole. And at the Olympic trials that year, Nike bragged that four of the top seven marathon finishers had worn its shoes. It left out that the first three had worn Adidas.

3:15It worked anyway. Nike went from under $3 million in sales in 1972 to almost $270 million by 1980, about 90 times bigger in eight years, and it went public that December. Then it hit a wall. In the mid-1980s, Reebok rode the aerobics craze past Nike to become the number one athletic brand. Even in 1989, Reebok was still outselling Nike, $1.82 billion to $1.71 billion.

3:41Nike's answer was a rookie. In 1984, the company held about 15% of the basketball shoe market. It signed Michael Jordan to a five-year deal worth $2.5 million. The NBA objected to his black and red shoes, and Nike turned the ban into an ad: "The NBA can't stop you from wearing them." Nike had hoped Air Jordan might bring in about $3 million. Within two months of release, it had sold $70 million, more than 20 times the target.

4:13In 1988 came three words. The ad man Dan Wieden said he got "Just Do It" from the last words of a death row inmate: "Let's do it." In the next eight years, Nike's sales went from $1.7 billion to $9.2 billion. More than five times bigger. And Reebok? Stuck at $3.64 billion.

4:40From then on, Nike played one way. A decent spot on the wall of shoes was never enough. It wanted the whole wall, and every signing after that, from Tiger Woods to LeBron James, chased that goal. In 1997 it even turned Jordan into a brand of his own, with a silhouette of him in midair in place of the swoosh. By 2023, Jordan Brand alone reported $6.6 billion a year in sales, more than 2,000 times what Nike once hoped the first shoe would bring in.

5:14And by early 2021, Nike had a new kind of hit. The Panda Dunk, a black and white revival of an 80s basketball shoe, was such an instant hit that pairs resold for several times the store price. That November, Nike's market value peaked at about $264 billion. In the year to May 2024, its sales passed $51 billion, the most in its history. That was the summit.

5:42And success that big does something to a company. Slowly, Nike stopped seeing itself as the company that made what athletes needed. It started to believe something much more dangerous, an idea that fits in one line: people don't need a store to find Nike, they'll come straight to us. And once that idea moved into the boardroom, it never moved out.

Betting on delusion 6:06

6:06In October 2017, Nike's then chief executive, Mark Parker, told investors the company had about 30,000 retail partners, and that it would now focus on about 40 of them. That's roughly one partner in every 750. Another senior executive put it bluntly: "Undifferentiated, mediocre retail won't survive." Nike wanted online sales to grow from 15% of its revenue to 30% by 2022, and it even stopped reporting how much its retailers had ordered ahead.

6:35Two years later, Nike walked away from Amazon, ending a trial it had only started in 2017. As one retail analyst told the BBC: "It's a case of Nike wanting complete control of its brand." Then, in early 2020, it handed the company to a new chief executive, John Donahoe, a former boss of eBay who had spent 23 years as a management consultant at Bain. That June, he launched what Nike called the Consumer Direct Acceleration.

7:05Nike reorganized its teams around men, women and kids, set aside $200 to $250 million just to pay for the job cuts, and stopped selling to a long list of stores: Zappos, Dillard's, Belk, DSW, Urban Outfitters, even Macy's.

7:20And at first, it looked like genius. Covid had changed how people shopped, and Nike's digital business roughly tripled, from about 10% of sales to 30%. In the year to May 2022, its direct sales hit $18.7 billion, up 14%. Nike's finance chief later said the push added tens of millions of new members and more than $12 billion in extra revenue. Nike seemed to have called the future one more time, and run straight at it.

7:50Then the shoppers went back to physical stores, and the shelf space Nike had given up did not stay empty. Running brands like On, Hoka and Brooks moved in. Foot Locker, where Nike had made up more than 60% of the stock, signed up Reebok, leaned harder on Puma, and watched its own shares fall. One Wedbush analyst summed up the mistake: Nike "misjudged the marketplace," because "the consumer wants choice" and "will still go to the multi-brand retailers." Even Nike's finance chief admitted the same push had "added complexity and inefficiency."

8:26Nike didn't stop to ask why. It doubled down, this time on a single shoe. Executives had kept the Panda scarce on purpose, restocking just often enough to keep it hard to get. Then the floodgates opened. In 2024, Dunks brought in an estimated $5.85 billion, nearly one in every five dollars Nike made. The resale site GOAT listed 4,700 different Dunk models. If you bought a new one every single day, it would take you almost 13 years to own them all. By early 2025, analysts at Piper Sandler were forecasting that Dunk sales would fall about 70% in two years.

9:05A shoe that only works when it's rare had stopped being rare. At the end of August 2022, Nike was sitting on $9.7 billion of inventory, up 44% in a year, almost one and a half times the pile it had twelve months earlier. It started marking products down to clear it, and in that one quarter its profit fell 22%. In the very same three months, Nike spent $1 billion buying back its own shares, and its press release quoted Donahoe saying Nike's strengths "continue to prove that our strategy is working." By late 2024, Nike's next chief executive would admit: "We've become far too promotional."

9:46And the bets got stranger. In December 2021, Nike bought RTFKT, a start-up selling digital sneakers as NFTs. Donahoe said the deal "accelerates Nike's digital transformation." Nike even put RTFKT's logo on the same level as the swoosh and the Jordan Jumpman. About three years later, Nike shut it down, and in December 2025 it quietly sold what was left. One investor sued, claiming Nike had caused "the rug to be pulled out from under" the value of those virtual sneakers. Nike asked the court to dismiss it.

10:20Then came 2024, the year it all caught up with Nike. In April, Donahoe told CNBC: "We recognize that in our movement toward digital, we had over-rotated away from wholesale a little more than we intended." By then Nike had announced a plan to cut $2 billion in costs over three years and more than 1,500 job cuts.

10:50In June, a single cut forecast wiped about $28 billion off Nike's market value, roughly half of what the whole company is worth today. On September 13th, Bloomberg Businessweek ran a profile under the headline "The Man Who Made Nike Uncool." Six days later, Nike announced Donahoe would retire, and SportsPro wrote that the overwhelming emotion among several former employees was relief. By Bloomberg's count, his years at Nike came with about $104 million in pay and benefits. Over those same years, Nike's market value fell by nearly $40 billion.

11:25Line these bets up and they share one belief. Years at the top had convinced Nike that customers would follow it anywhere: off the shelves they knew, onto an app, into one more version of the same shoe, even onto the blockchain. Nike never lacked money, talent or famous athletes. What it lost was the habit of earning the sale, one runner and one store at a time. Every time a bet failed, the answer was a bigger bet in the same direction. Still, blaming Nike alone would be too easy. Did Nike trip over its own feet, or did the track itself change under it?

Falling behind competitors 12:06

12:06Some of it really was the market. The online shopping boom faded. In China, which brings in about 15% of Nike's revenue, local brands like Anta and Li Ning got stronger, and Nike's sales there have now fallen for nine quarters in a row. And in late 2025, Nike said new tariffs would cost it about $1.5 billion in a single year.

12:30Nike knew something had to change. In October 2024, it brought back Elliott Hill, a man who started at Nike as an intern and spent 32 years there before retiring. On his first earnings call as chief executive, he said it plainly: "We lost our obsession with sport." He has refocused the company on individual sports again, and rebuilt ties with the stores Nike walked away from. And here is the twist.

12:58In the year to May 2026, sales through Nike's own stores and app fell 6% to $17.7 billion. Sales through other people's stores, the channel Nike spent years trying to shrink, grew 6% to $27.5 billion.

13:12It hasn't stopped the slide. In the year to May 2026, Nike's total sales were $46.4 billion, about $5 billion below the peak. In the three months to August, they fell another 4%, and sales in China dropped 26%, more than one dollar in every four. Nike now expects the whole year to shrink. Its fix is a plan called Pace, meant to save about $2.5 billion in total through fiscal 2031, with job cuts starting in 2027.

13:41And in China, starting in January, Nike will pull online selling rights from some of its biggest retail partners. An analyst at BNP Paribas put it this way: "Nike does not have a channel problem in China, but rather a product problem."

13:58Yet the market can't carry all the blame, because Nike's rivals faced the same weather. In October 2022, Adidas ended its deal with Kanye West and was left with 1.2 billion euros of unsold Yeezy shoes piled up in warehouses. In the last three months of 2022 alone, losing Yeezy cost it 600 million euros in sales. And yet, for 2025, Adidas reported record revenue of 24.8 billion euros, with the Adidas brand growing 13% in constant currency for the second year in a row.

14:29The newcomers look even better. Hoka grew 16% in the year to March 2026, to $2.59 billion. On, the Swiss brand that signed Mbappé to launch its first football boots, grew its sales 30% in 2025, to more than 3 billion Swiss francs. They didn't stand still, but their new shoes and new athletes all pointed the same way they were already going. Adidas, for its part, said it kept its discounts under control.

14:58That left Nike chasing its own tail. To win back the shelves it had given away, it leaned on discounts and old favorites. The discounts made the swoosh feel cheaper, and the old favorites made it feel tired, which meant fewer full-price sales and more cost cuts. The numbers show where that loop leads. Nike joined the Dow Jones Industrial Average, the 30-company index, in 2013. Since then, according to Reuters, its share price is up about 5%, while the S&P 500 has more than quadrupled. Nike now carries the smallest weight of all 30, and one head trader told Reuters that "it probably is a candidate for removal."

Vision isn't enough 15:41

15:41Nike never ran short of cash or nerve. And it usually spotted the future before almost anyone else: cheaper Japanese shoes in the 1960s, a basketball rookie as a brand in the 1980s, shopping moving onto phones in the 2010s. Where it went wrong was the execution: walking away from the stores that introduced it to customers, making so many versions of its hottest shoe that nobody needed one, and chasing the next digital idea while runners went looking for a better running shoe.

16:13The brands that overtook it weren't geniuses. Adidas protected its prices. Hoka kept serving runners. On kept betting that a better shoe could charge more. Not one of them tried to become something else. Nike did, and forgot the one thing that made it. It was named after victory, but victory was never the thing it sold. It sold the shoe that got you there.