Shoemakers look to Olympics for a runaway success

A lot is riding on this Summer’s Olympic Games in Paris for global sportswear brands that desperately need a catalyst to boost sales. And there are early hints from major Asian suppliers that leaders like Nike Inc. and Adidas AG, which get most of their revenue from shoes, may already be enjoying a rebound.

Pou Chen Corp., which makes shoes for those two names along with Converse, Puma and Skechers, has traditionally served as a good leading indicator of the sports-footwear industry’s fortunes. For example, Adidas’ shipments of shoes dropped 26% last year, similar in scale to the 20% decline at the Taiwanese contract manufacturer. More recently, Nike, whose fiscal year ends on May 31, eked out 0.1% growth in footwear revenue for the three months to Feb. 29; Pou Chen’s slide in sales narrowed to 3% in the December quarter, the strongest performance in a year.

A new lineup of models timed for the Paris games, which commence July 26, could spur consumers. Brands use the global event to highlight star athletes on their promotional rosters, with the tacit message that if you, too, want to be an Olympian then they have the footwear to get you there.

Tightly connecting sportswear to actual sports is a much-need retro marketing move. In recent years, critics have complained that these companies ventured too far into casual and leisure, straying from their core missions. Nike veered from its roots as a maker of cutting-edge footwear for serious athletes, the Wall Street Journal reported, citing current and former employees. The company’s revenue and profit growth stagnated as a result, and its stock tanked.

“We must sharpen our focus on sport,” Nike CEO John Donahoe told investors in March. In the world of athletic shoes, that means utilizing materials technology to boost performance in areas including speed, weight and stability. These also happen to be the products customers are willing to pay a premium for as they seek to break a marathon personal best or outrun rivals on the popular sports-focused social-media app Strava.

It looks like 2024 will be a lot more profitable, even if actual unit sales don’t rebound sharply. A return to brand makers’ roots will help not only reinvigorate their image, but boost margins.

The industry is looking to reverse a strategy employed during the pandemic when it cut prices to clear stock and refrained from coming up with cutting-edge new products to lure consumers.

Both Nike and Adidas have noted that an ability to increase the average selling price of footwear, and stronger demand at the higher end — where shoes sell for more than $100 — is a key contributor to this year’s expected upturn. What they’re betting on is not so much to move more pairs, but to ensure those that are bought are more expensive.

That’s already been seen at Pou Chen. Its Hong Kong-listed affiliate Yue Yuen Industrial (Holdings) Ltd., the group’s shoe-making arm, posted a 5% drop in revenue for the March quarter, in US dollar terms, but forecast that net income for the period would be as much as double a year earlier. That’s “driven by the gradual recovery of the global footwear industry, leading to an improved capacity utilization rate and better production efficiency,” it said. Smaller rival Feng Tay Enterprise Co. reported a 6.5% rise in revenue, in Taiwan dollar terms, in the first three months of the year, though a strengthening greenback likely contributed to that gain.

Yue Yuen managed to increase both the average price for the shoes it sells to marquee clients, and fatter margins in 2023. It now charges 30% more per pair than it did in 2018.

Because big names like Nike and Adidas are not chasing cheaper shoes, and aren’t seeking to merely squeeze suppliers on price, manufacturers are also able to focus on higher-margin offerings.

Like the Olympic motto, the industry is betting the sports-shoe market this year will be faster, higher, stronger.

Source: Fashion Network

September 17, 2025 2 min read

May 06, 2024 6 min read

#Skintok Takes Wellness Mainstream Newer post

May 07, 2024 2 min read

Shoemakers look to Olympics for a runaway success

Related posts

Get the trends latest delivered

Subscribe to our newsletter