Nike, Michael Jordan to introduce new brand Basketball shoes, sportswear to be sold under star's name

Apparel

September 10, 1997|By BLOOMBERG NEWS

BEAVERTON, Ore. -- Nike Inc. and basketball star Michael Jordan yesterday announced a new line of basketball shoes and sportswear to be made and sold by Nike under the "Jordan" brand name.

The first Jordan products are expected to be on store shelves Nov. 1, in time for the holiday selling season.

The line, which will include the current Air Jordan brand, is expected to generate more than $300 million in revenue in fiscal 1998, analysts said.

The move allows Nike, the world's largest maker of athletic shoes and sportswear, to gain even more of the basketball-shoe market through another brand, analysts said. At the same time, Nike can avoid overexposure of its own "Swoosh" brand symbol, they said.

"They already have a 50 percent market share in the [basketball] shoe category," said Margaret Mager, at Goldman, Sachs & Co. "It would be difficult to increase market share from such a high level using the same brand."

The company had been discussing the new brand with analysts for about six months, Mager said. Since Nike's total sales in fiscal 1997 were $9.19 billion, it's unlikely that the additional revenue generated by the Jordan brand will affect Wall Street's earnings estimates, Mager said.

Nike shares rose 37.5 cents to $54.625 in trading of 1.83 million.

Nike's Air Jordan basketball shoes, which generated close to $70 million in sales in fiscal 1997 and are the most popular athletic shoe, will now be sold as part of the Jordan line.

The newest Air Jordans, the 13th model in the series since they were introduced in 1984, will sell for $150 and, like all of the Jordan products, will feature the Jordan Jumpman logo, a silhouette of Jordan dunking a basketball.

Pub Date: 9/10/97

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