Amid a Reset, Nike Is Leaving Market Share on the Table: Here’s How Brands Like Adidas, Hoka and On Can Move In

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Nike is falling behind in the sneaker wars. And its competitors are waiting in the wings to snag that coveted leftover market share.

In a call with analysts last month, Nike chief executive officer John Donahoe said that fiscal year 2025 will be “a transition year” for the company after it cut its outlook for the year.

The company’s latest woes — which include declines in lifestyle sales, foreign exchange headwinds and macroeconomic uncertainty — compound other issues that have built up over the last several months. Among them: layoffs, a broad lag in product innovation, an undefined marketplace strategy and a failure to challenge to increased competition from other brands in crucial categories like running.

To be sure, the Swoosh is still No.1 in the sector, with an impressive $51 billion in sales last year and a market capitalization of nearly $110 billion. But for the last several years, brands like On, Hoka, Adidas and New Balance have edged their way in.

According to analysts, there are several opportunities for Nike’s competitors to pick up wins as the Swoosh attempts to regain its mojo.

“Nike has a lot of surface area for competitors to take share from,” said M Science research analyst Drake MacFarlane. He noted how in the performance run space, where the Swoosh has notably lagged, smaller challenger brands like On and Hoka are picking up speed. On the lifestyle side, Adidas is seeing wins with its retro looks like the Samba, Campus and Gazelle. And even athleisure apparel brands like Alo, Lululemon and Vuori are disrupting the sector.

“For Nike, it’s a tough situation where you have to finally reset your brand over the next year and try to do product refreshes while there are new challengers able to take share from the incremental new consumer.”

A new world for wholesale

One of Nike’s key priorities is rightsizing its wholesale presence after spending several years focusing DTC channels and pulling out of major wholesale doors. In the last year, Nike has re-entered or reinvigorated wholesale partnerships with retailers such as DSW , Macy’s and Foot Locker .

But the company isn’t entering into the same landscape it exited in 2021. For better or worse, some retailers had to learn to live without relying on the Swoosh and filled the void with other brands.

“Nike had previously incentivized wholesale partners to push other brands (since it was pushing so hard in DTC),” wrote Wedbush analyst Tom Nikic in a July 3 note to investors. “But Nike has probably learned a hard lesson that the wholesale channel cannot be taken for granted.”

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That’s probably why Nike recently rehired former senior executive Tom Peddie to oversee — and likely try to mend — the brand’s relationships with marketplace partners. But even if some retailers aren’t feeling burned by the Swoosh, they’ve learned the importance of having product variety.

“Given that we have so many brands that are so strong right now, it would be the best choice for [retailers] to diversify,” said Jane Hali & Associates analyst Jessica Ramirez. She explained that while Nike and Adidas used to be the unquestionable leaders in the sneaker space, other brands have risen in the ranks since then. “The landscape is completely different than it was six years ago.”

Nike cut ties with Amazon in 2019. Since then, younger DTC-focused brands like Allbirds and Rothy’s have expanded their wholesale presence there.

And according to Rutger Wismeyer, an e-commerce management consultant based in the Netherlands, withdrawing from Amazon meant Nike lost control over its brand identity on the platform. This gave room for resellers to potentially gain total control over the brand’s price, look and customer journey.

“As a brand, you need to be where the consumer is,” said Wismeyer. “And that’s including Amazon, specifically in the US, but also in Europe.”

The talent equation

Nike ‘s two rounds of layoffs at its Beaverton, Ore. headquarters concluded in June and impacted hundreds of employees across several functions. Many of the cuts were concentrated in top leadership roles across several business units. And since the start of the year, several Nike leaders have departed to other opportunities at brands like Hoka and Athleta .

This talent exodus created opportunities for competing brands to scoop up seasoned shoe dogs. Just this week, performance training brand Nobull took to X to invite recently laid off Nike employees to apply for its open roles.

“A lot of that [Nike] talent has gone to many of these other sportswear brands,” Ramirez pointed out. “And it’s been either from the designer end or the marketing people. And that has been a true positive for the other brands. And I do feel like that has hurt Nike.”

And for those that have stayed on board, layoffs, increased office requirements and sagging sales results do not make for strong employee morale. That potentially makes competitors with a Portland, Ore. presence like On, Lululemon, Columbia Sportswear, Hoka and Adidas look a lot more inviting.

“If you want to innovate, and you feel like you’ve been stymied at Nike, there are a lot of other options right in your neighborhood,” MacFarlane said.

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