Nike, Inc.

• Date Founded: 1964
• Industry: Sports Footwear and Apparel
• Corporate Headquarters: Beaverton, Oregon
• Type: Public

Nike, Inc., based in Beaverton, Oregon, designs and markets athletic footwear and apparel sold around the world. Nike sells its products through company-owned stores, outlets owned by licensed retailers, and also directly to consumers via the internet. The company was founded by Bill Bowerman and Phil Knight in 1964 as Blue Ribbon Sports. It later changed its name to Nike and went public in 1980.

The company’s first product was running shoes. Initially, its target audience was professional and serious amateur athletes. However, the shoes quickly attracted the attention of the general public, rapidly boosting the company’s market and sales. Nike later extended its line to athletic footwear designed for many other sports as well, primarily basketball, football, tennis, and soccer. Additionally, athletic apparel for men, women, and children eventually grew into a significant source of income for the company. In 2017, to further capitalize on this market, the company instituted a women's plus-size apparel line for the first time.

The company became renowned for its multifaceted and skillful marketing strategies. Nike has historically furnished uniforms, footwear, and equipment to professional sports leagues and college teams—as well as to many top individual athletes through sponsorships—to promote its products. It also sponsors major sporting events. Nike has continued to capitalize both on its iconic Swoosh logo, adopted in 1971, and on its simple yet distinctive slogan, "Just Do It," which was introduced in 1988.

Its principal competitors in footwear, equipment, and apparel include Adidas, Asics, Reebok, New Balance, Columbia Sportswear, lululemon athletica, Under Armour, and VF Corporation. Nike’s revenues from its athletic apparel alone tend to be on par with those of the largest clothing manufacturers, not just manufacturers of apparel designed for physical activity.

History

Before teaming up as business partners, Bill Bowerman and Phil Knight met at the University of Oregon in the late 1950s. While serving as the track coach there, Bowerman made shoes on the side from his own designs for runners on his team, including Knight. In 1964, Bowerman and Knight established Blue Ribbon Sports, the company that would become Nike, Inc. Blue Ribbon initially sold running shoes as a distributor for a Japanese company, Onitsuka Tiger, which later became Asics Corporation. University track meets became open-air venues for the two men’s operations, and they used the trunk of a car as a mobile store.

In 1968, Bowerman designed the Cortez running shoe, an instant hit, which Onitsuka Tiger added to its line of products. In 1971, Blue Ribbon Sports dissolved its relationship with that company and shortly thereafter began manufacturing its own running shoes, including the Cortez, in the United States. Bowerman and Knight later turned over all of their footwear and apparel production to factories overseas, primarily in China, Vietnam, and Indonesia.

Bowerman continued refining his designs, and in 1971 he invented an entirely different style of sole, using a waffle iron to make a prototype. The pseudo-rubber waffle tread offered better cushioning and grip that runners loved. When talking about this revolutionary design, customers called the footwear the moon shoe because its tread made marks like those left on the moon by astronauts Neil Armstrong and Buzz Aldrin a few years earlier.

The company changed its name in 1978 to Nike, Inc., after the Greek goddess of victory. The company went public in 1980, and its shares continued to be traded on the New York Stock Exchange into the twenty-first century.

In its early years, Nike consistently promoted its products among serious athletes at high-profile track events, including the US Olympic Trials in 1972. The company looked to partner with prominent athletes who would use and promote its products. Professional tennis players like Ilie Nastase and Jimmy Connors were among the first of many athletes who provided brand endorsements. In 1985, Nike partnered with basketball superstar Michael Jordan to develop a line of footwear bearing the name Air Jordan, and these shoes became a sales blockbuster. Over time, Nike’s strategy for and commitment to sponsoring sports leagues, teams, and individual athletes influenced how other companies structure such partnerships.

In the 1970s, many amateur athletes began running for exercise. These athletes discovered Nike’s shoes and created a huge demand for the company’s comfortable and lighter-weight footwear. Nike’s primary market changed from serious athletes to average consumers in countries around the world.

Though the sports equipment business was well-established by the late 1990s, Nike decided to invest heavily in refining several types of gear using improved technology, including baseball gloves, lacrosse sticks, soccer balls, and shin guards.

Nike began selling its products online in 1999. That year, the company began devoting resources not only to expand sales through brick and mortar locations but also to augment its brand recognition on the internet generally and leverage online tools to improve its ability to reach customers directly. Nike introduced a way for customers to design their own shoes using NIKEiD on its website.

Over time, the company became the largest seller of athletic footwear, apparel, and equipment in the world. Historically, North America has been the company’s largest market. To support operations elsewhere, Nike introduced country-specific websites to target consumers in its major markets, such as China and Japan. Europe, Latin America, and other Asian countries also account for significant revenues.

Nike acquired sneaker maker Converse in 2003. This subsidiary has generated significant revenue for the company.

In 1980, Nike formed a Sports Research Lab, which collaborated with athletes to better understand their needs and address them. Data from its research was applied to refining existing products and coming up with new innovations. After several years of work in the company's devoted research and design labs, in late 2016, Nike released its first self-lacing shoes to the general public, with technology that allowed the footwear to electronically adjust to the wearer's foot; it was labeled the HyperAdapt 1.0. In early 2019, Nike released the Adapt BB shoe, the second generation of the HyperAdapt. The Adapt BB was sold at a lower cost, making it more accessible, and used Bluetooth technology for a wireless connection to a smartphone application to control the tightness of the shoe.

The company remained an industry leader into the 2020s. While it experienced a dip in revenue in 2020 amid store closures and an economic recession associated with the global spread of the COVID-19 pandemic early that year, it posted a record revenue of $44.5 billion in 2021, with a record profit increase of 196 percent between 2020 and 2021. Nike’s annual revenue in 2023 increased further to $51.19 billion, and it remained the world’s largest athletic apparel company, though its annual revenue figures began to stall in 2023 and 2024. Critics blamed the slow growth on an over-reliance of top products like the popular Nike Air Force 1 sneaker line and a lack of innovation and introduction to the market of new styles. Observers also noted that other companies, such as Hoka and New Balance, have done a better job of marketing their shoes to the running market, which has grown significantly in the US since the COVID-19 pandemic.

Controversies

Some of the company’s actions have created well-publicized controversy and opened the company to criticism. For example, because it largely relies on overseas factories to make its products, Nike has been accused of tolerating poor working conditions, paying extremely low wages, and employing children in some of those factories, some of which have been described as sweatshops. In 2021, amid increased international outrage over China's repression of the Uyghur people in the western Xinjiang region—a crackdown described as a genocide by the US and some other governments—a court in the Netherlands accused Nike and other companies of profiting off the forced labor of Uyghur people.

Within the United States, Nike's sponsorship of the NFL has drawn attacks following cases in which high-profile football players have been charged with domestic violence. In 2015, the company name was linked to an extensive bribery and corruption scandal within FIFA (the international organization that sponsors soccer’s World Cup), although no legal charges were filed against the company.

Nike has also featured multiple controversial people in its advertising, including cyclist Lance Armstrong after his doping scandal and golfer Tiger Woods amid his adultery scandal. In 2018, Nike announced that football player Colin Kaepernick—who had started a movement to kneel during the National Anthem before football games to protest racism in the US—would be the face of Nike's thirtieth anniversary "Just Do It" campaign. In response, some people took to social media to publicly burn Nike products and denounce the company. Immediately after the ad featuring Kaepernick ran, Nike lost almost $3.3 billion in market capitalization. However, the company regained the loss within weeks and reported an increase in sales. In 2023, the company was further embroiled in controversy when it partnered with transgender activist Dylan Mulvaney, making her the first transgender face of the brand and angering some conservative members of Nike’s customer base. Nike remained steadfast in its support of the gender pioneer.

Impact

Despite occasional periods of financial strain, Nike has historically experienced an overall trajectory of tremendous growth, becoming one of the most recognized sneaker and athletic wear brands in the world. Its innovative products and marketing savvy are largely responsible for this success.

Nike has historically been involved with philanthropy in a variety of ways. In 2008, it launched the Nike Foundation, whose focus is improving the education, health, and futures of adolescent girls living in poverty around the world. Because the high incidence of obesity in children has become a significant public health issue, Nike partners with public and private organizations to encourage physical activity in children.

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