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Walking round Nike's European headquarters outside Amsterdam, everyone, it seems, is ready to play sport. Nike-clad employees mill about on their way to the many sports facilities on the site, which, like the US group's main base in Oregon, looks more like a university campus than a corporate headquarters. Eunan McLaughlin, the 46-year-old head of Nike's European business, likes taking part in sport. To prove it, he owns more than 350 pairs of trainers. But when it comes to business, just taking part is not enough. It is the winning that counts.

The Olympic Games in Athens are offering ample opportunities for Nike to promote its products. But Mr McLaughlin's attention is also focused on the soccer season, just started in England and Germany.

New figures show that Nike has for the first time overtaken Adidas as the leading soccer brand in Europe. NPD, a market research firm, tracks consumer “value sales” in the UK, France, Germany, Spain and Italy. It calculates that Nike had 34 per cent of the soccer footwear market in the 12 months to March, with Adidas responsible for 30.2 per cent.

It is a significant turnround for Nike, which is best known for its basketball and athletics sports gear.

“The feeling after the US World Cup in 1994 was that we really needed to get into football because people didn't take us seriouslyas a football brand,” says Mr McLaughlin. “I think that at that time we were ranked seventh internationally. Then, from 1994 to 2002, we went from seventh place to second.”

He declines to give an exact figure for the size of the group's soccer business. But two years ago Morgan Stanley, the US investment bank, estimated that the division was worth about $500m in sales. “We've doubled [soccer sales] since 2002,” he says.

The increase has been driven by new products, such as the Mercurial Vapor, the lightest boot on the market, weighing just 196g, and the Total 90, worn by Nike-endorsed stars such as Wayne Rooney, the hottest property in English soccer.

Nike's endorsement strategy is a key feature of its effort to maintain its credibility among its customers. If its products are worn - and used - by some of the biggest names in sport, then it can hope to be what Mr McLaughlin calls “an authentic brand”. If that happens, he explains, “the rest will come”.

Nike has signed up some major international soccer stars and teams, who have helped the growth of its football business. It does not have David Beckham, the English star at Real Madrid, who has a deal with Adidas. But it has contracts with England's two most successful soccer clubs: a long-term kit deal with Arsenal and a £300m ($548m) multi-year deal with Manchester United. It also made kit for the Portugal soccer team that reached the final of Euro 2004. Aside from Rooney, it has deals with Thierry Henry, the French star, and Ronaldo, the Brazilian striker.

“We go after teams and individuals that play attractive football,” says Mr McLaughlin. “We don't just want to be sticking the [Nike] swoosh on anybody and everybody. It's about bringing some excitement and innovation to it.

“There are now more boots being worn in the [English] Premier League by Nike players than any other brand,” he adds. “Almost half the goals scored at the European Championships - 38 out of 77, I think - were scored in Nike boots. The testimony to the product quality and innovation is there from the players and from the athletes.”

Not every Nike-sponsored player can turn in a successful performance, however. Henry was expected to star at Euro 2004 but, together with his French team mates, was knocked out of the competition at an early stage. Similarly, LeBron James, the teenage basketball sensation whom Nike signed last year on a seven-year deal worth a reported $90m, could not save the US Olympic basketball team from a humiliating defeat this week to Puerto Rico.

But defeats happen in sport and, like its rivals, Nike is not immune to any dips in the form of the stars it sponsors. Great things are still expected of James in basketball as they are of Rooney in soccer. “I think the Rooney signing will be huge,” says Mr McLaughlin. “The main thing is to make sure that he stays on the rails . . . We have to make sure he doesn't end up being commercialised too soon and too quickly.”

Like many of Nike's customers, Rooney is young. And with brands fromall sorts of industries targeting young consumers,Mr McLaughlin says Nike has to remember that it is also competing against companies from outside the sports world.

“Growing up as a kid, all I did was play football,” he says. “You made the goal posts, you kicked a ball around - that was the way we grew up.

“But today, kids are on PlayStation . . . so I think part of our challenge is to keep football exciting for kids, to keep them inspired and interested in it. In the past, people thought of us competing only against Adidas or Puma, but in reality we are also competing against electronic games or mobile phones, which is where kids are spending their money.”

Nike is not only besotted with soccer. The Olympics are providing it with the chance to parade new products. Some of these may never make it into shops. As Mr McLaughlin says, the Olympics are like haute couture in the fashion industry, giving an indication of what Nike's customers will be buying tomorrow.

“It's like the Milan catwalk. We don't sell many Cathy Freeman speed suits to the general public, but it shows people what we are doing with the brand, what we are doing with technology. We take that technology [see below] and we cascade it down to street-wear.”

But the Olympic Games present considerable challenges to marketers. Talk of drugs scandals is loud, and companies whose endorsed athletes are caught cheating could suffer some nasty commercial repercussions. Marion Jones, the US track star - and Nike-sponsored athlete - has become embroiled in controversy, having been interviewed twice by the US Anti-Doping Agency as part of its investigation into Balco, the nutritional supplements company alleged to have supplied drugs to a number of top athletes.

Mr McLaughlin says Nike's policy regarding doping is clear. “We would never condone the use of any kind of illegal substances or banned substances - or anything of that nature, ever. The second thing is that we always support our athletes until proven guilty.

“We've worked with Marion Jones for years, she's been a huge inspiration on some of our products and we're delighted to continue working with her. She has come out with a number of statements on [the allegations] and until there's any evidence or anything to the contrary we will continue to support her.”

Mr McLaughlin expresses confidence that the Olympics will be a success: “It will be huge for us.” The secret of further growth, he says, is to imagine that Nike is taking part in a competitive sport. “In basketball, no coach has ever said ‘get out and score 84 points' - they say ‘get out there and win'. If the other side has scored 90, then we need to score 92. So our belief is that, in every aspect of your business, you've always got to win.”

It might, as Pierre de Coubertin, the French aristocrat who organised the first modern Olympics in Athens in 1896, put it, be the taking part, rather than the winning, that is important - but not for Nike.

THE RACE TO BE FIRST TO GIVE ATHLETES WHAT THEY NEED TO WIN

Nike is working with Paula Radcliffe, the marathon world record holder and Great Britain's long-distance running Olympic medal prospect. It has designed a so-called “cooling jacket” to be worn before she races. The company claims that, by reducing a runner's core body temperature before competing, it can enhance performance.

The hope is that the jacket will be as memorable as the green and white all-in-one speed suit that Nike designed for Cathy Freeman, the star sprinter who won the 400m gold medal at the Sydney Olympics four years ago.

The picture of the Australian athlete slumped on the floor, the hood of her suit pulled off as she took in the magnitude of her achievement, became one of the enduring images of the Games.

Nike launches new products designed for particular athletes at every Olympics. If the athlete wins, Nike can hit the commercial jackpot because the resulting international exposure links the company with genuine sporting success.

In 1996 Michael Johnson smashed the 400m world record and he also won a gold medal in the 200m, wearing a pair of gold Nike spiked running shoes. Nike made them for Johnson after he requested a pair of shoes that were lighter than the gold chain he wore round his neck.

As well as Radcliffe's cooling jacket, Nike has developed a new track shoe - branded the “Monsterfly” - that appears to have a spring attached to the heel. It is designed to help sprinters power out of the starting blocks.

The Nike marketing blurb says that the “unique” shape of the shoe helps the “sprinter to keep the foot in a proper position, stabilising the heel for optimal traction”.

Cynics would say such products are gimmicks. That may be true but, as athletes strive to improve their performance, they are likely to try anything that they think will help them win - providing it is within the rules.

And if they win, Nike wins too.

Copyright The Financial Times Limited 2017. All rights reserved.
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