Yahoo Finance Michael Jordan’s Legacy Still Fuels Jordan Brand Growth
Walking into the Michael Jordan Building at Nike, Inc.’s corporate headquarters in Beaverton, Ore., it’s hard to miss the quote that is etched into glass in a wall at the entrance.
It reads: “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games, 26 times I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that’s why I succeed.” — Michael Jordan.
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Succeed he has.
Since the Chicago Bulls superstar was persuaded to sign with the nascent Nike brand rather than the then-dominant Adidas in 1984, he has personally made more than $1.4 billion from the deal. And he’s brought in countless millions to Nike as well over the past 38 years.
The Jordan brand, whose Jumpman logo has become ubiquitous in the basketball and streetwear communities, posted sales of $4.7 billion in fiscal 2021 alone, an increase of 31 percent over the prior fiscal year. That marked its biggest year ever with double-digit growth in every region as well as triple-digit growth in women’s. Sales in North America also increased in the double digits.
Over the years the company’s most successful product has inarguably been its Air Jordan 1 sneaker,s which were introduced to the public in 1985 and are still popular today. The brand has collaborated with everyone from Supreme and Off-White to A Ma Maniere, Travis Scott and Billie Eilish.
Courtesy of Nike
But there’s more to the Jordan Brand than just its trademark basketball sneaker. It now encompasses a wide variety of products for a large number of sports including soccer, baseball, golf and boxing. It also expanded recently into the collegiate world for the first time through partnerships with universities in Florida, Michigan, North Carolina and Oklahoma. The brand even inked a deal earlier this year to outfit the basketball teams at Ateneo de Manila University in Southeast Asia, its first such deal outside the U.S.
In addition, Jordan Brand has been visible in the fight against racism, committing to donate $100 million over 10 years to address social and economic justice, education and awareness of the role race plays in society.
Jordan himself is not involved in the day-to-day operation of the brand and the business has been entrusted to Craig Williams, a onetime nuclear power officer in the U.S. Navy whose business career includes top roles at The Coca-Cola Co., McDonald’s and Kraft Foods Inc.
The Jordan Brand has been a stand-alone business since the mid-’90s, but draws on the strength of its parent to help it expand.
“We’re empowered to grow this brand and make the most of it in geographies around the world,” Williams said. “And that’s where the distinctiveness and the independence — if you want to call it that — come into play. But we are turbocharged by being a part of a great global company called Nike Inc. It helps us to efficiently get things done in a way that if we were an independent company, we wouldn’t have that luxury. So it’s important for me, when I think about it with the team, to be both collaborative to take advantage of the wealth of opportunities that Nike offers us, while also being free to be able to make the most of every consumer opportunity that is out there.”
The core of the brand, as it has been from the outset, continues to be basketball — particularly footwear. Although the company declined to say what percentage of overall sales its shoes, and the Air Jordan 1 in particular, represent, Williams did say: “Basketball will always be center court for us. But the ideals of the brand, the aspirations, have moved beyond basketball into adjacent sports. And obviously, it’s very relevant in culture. We live in the world of sport, you’ve seen us on the football field, you’ve seen us on the pitch in Europe. But we’re also relevant in just about every facet of a consumer’s life right now.”
That being said, Williams added that the overall growth of the brand “has been driven by continued energy for Jordan’s most coveted icons, including the AJ1 and AJ11, as well as new product dimensions. Deepening our relationships with community and collaborators has inspired fresh ways to reimagine and reintroduce the AJ1.”
In December, he continued, “The AJ11 ‘Cool Grey’ launch on Snkrs was the largest for a single style in the history of Nike Direct. We drove this unprecedented demand by engaging with consumers in new ways, leveraging Snapchat’s ‘Try On’ lens, a hashtag ‘InMyJs’ Instagram activation and a Fortnite partnership with custom skins and a digital scavenger hunt.”
But the biggest opportunities currently lie within women’s and children’s, he said, along with more “modern interpretations of footwear and apparel to balance the excitement that consumers have around our retro business. I think our opportunities are endless, but the biggest discipline that we have to employ is how to be focused and prioritize each of them in the right way.”
Women’s, in particular, has been on a tear, experiencing growth of 170 percent overall in fiscal 2021 and sales that more than quadrupled in the fourth quarter. Apparel also represents a “huge growth opportunity for the Jordan Brand.” He pointed to the Flight Essentials apparel collection for women as a standout as well as collaborative products such as the Aleali May AJ1, “which drove over 40 percent female buyers — more than 10 points higher than the average AJ1 buyer profile.”
As the company as a whole puts more focus on direct-to-consumer selling, Jordan will also explore how to expand its customer relationships and “how that comes to life.”
Tom DiPace via AP
Although both Nike and Jordan are sports brands and many of the growth opportunities align — women’s, direct-to-consumer — there are differences, Williams said.
“Nike has a different set of attributes and what we want to do is maximize our share of their closet. So it’s really important for us to be able to speak in an authentic voice for Jordan. What I love is the fact that we can get two hangers in the closet versus one, that’s the ultimate pursuit. And if we can do that, that’s fantastic. If we only get one, then you know, it’s a missed opportunity for us.”
Williams described the Nike brand as “closely associated with everything that revolves around sport and activity and getting everything out of yourself that you can imagine. The Jordan Brand started with the man himself, a man who defied gravity for the briefest of moments jumping from free throw lines. A man that is considered the greatest of all time on the basketball court. Those attributes of greatness and excellence, and striving to be the absolute best in the game appeal to consumers all across the world. It doesn’t matter if you’re male or female, adult or kid, what matters is an aspiration to those things that the brand stands for, as a result of what the man stood for. So from that perspective, we’re pretty clear about how to align to those attributes.”
He said the man himself is part of the brand’s advisory board and meets with the team on a quarterly basis to “review strategic opportunities for the brand. He is still passionate about the game and the brand.”
What’s interesting is that although Jordan retired three times — 1993, 1999 and finally 2003 — he remains as big a star as ever. But that doesn’t surprise Williams.
“I’m not surprised at all, because his story is so relevant,” he said. “Being cut from a high school basketball team, and then coming back and starring on that basketball team and going on to be the greatest. If you tell any kid that story, they say, ‘You know what? I can do anything, I can overcome.’ And since his exploits on the basketball court, he’s done the same thing in the world of business. He became a majority owner of a basketball team [the Charlotte Bobcats, now the Hornets], and he’s done so many things from a business standpoint, that he is literally the prototype for many professional athletes that are also trying to do things beyond their playing days.”
In addition, with sites such as YouTube, the youth of today can easily see clips of Jordan on the court, “so it’s easy to re-educate them,” he said.
But while the backstory is inspirational, the Jordan Brand is still a business and Williams and his team face challenges like any other brand.
“Our biggest challenges are the many uncontrollable external factors that we have to deal with,” he said. “The biggest among them is COVID[-19] and what impact it will have in local markets around the world. None of that is predictable. We’re dealing with shutdown situations in Greater China right now. Frankly, 90 days ago, we were optimistic that our worst days were behind us. But when I look at COVID[-19], the geopolitical issues, the conflict in Europe, or the threat of recession, they represent the biggest challenge for us because they will impact the consumer.”
Xu Huiyang/AP
Jordan Brand already operates stores in Asia and is expected to open its first units in the U.S. next year. An opening in Manila — a country he categorized as “a hotbed of basketball culture” — in November 2020 has been a home run. “This store has consistently outperformed expectations and is driving incredible consumer interest in Jordan Brand,” Williams said.
The retail footprint also includes South Korea, where Jordan opened a store in Hongdae in 2017, and another in Gangnam-gu in 2020. “The Gangnam-gu Jordan store represents a pivotal moment for the Jordan Brand retail, representing a new retail concept inspired by MJ’s legacy and authentically grounded in basketball culture,” Williams said. “The new design aesthetic is more rooted in the game and the community of basketball than ever before, leading with a design palette that is authentically connected to the heart and soul of the brand. It balances a clean modern aesthetic with soulful storytelling, rich textures, and warm nostalgic undertones.”
Closer to home, he said the retail plan is to invest in stores to “address gaps in distribution to serve the growth opportunities we see in Jordan. We will begin testing a Jordan-only concept in North America in fiscal year 2023, leveraging a popular consumer experience that has been wildly successful in Greater China, the Philippines, and Korea. Our approach is to first pilot these concepts, iterate and perfect, and then move to scale.”
Beyond the business, Williams said he’s most proud of Jordan Brand’s social justice initiatives.
He pointed to Jordan Wings, a program that educates and mentors underprivileged youth around the world and inspires them to achieve greatness on their own terms. In addition to scholarships, the Wings program offers a design program for youth who are seeking to enter design schools, launch their own brands or create products for social change.
“We started in North America and it’s been extended into Europe, into Greater China and will soon be in parts of Asia,” he said.
Jordan himself remains relevant to both adults and kids, as evidenced by the successful miniseries “The Last Dance” that aired on ESPN and Netflix during the height of the pandemic in 2020. The documentary, which revolved around his career and focused on his final season with the Bulls in 1997-1998, won a Primetime Emmy Award and introduced him to a whole new generation.
This followed the original “Space Jam” live action/animated film from 1996 when Jordan starred alongside Bugs Bunny and other Looney Tunes characters. The film brought in $230 million at the box office and more than $1 billion in merchandise sales. A sequel starring LeBron James came out last year, but generally was seen as being less of a cultural moment than the original.
Next up is a film that will star Ben Affleck and Matt Damon about the early days of Nike and how company cofounder Phil Knight managed to convince Jordan’s manager Sonny Vaccaro to have the basketball star to sign a sponsorship deal with his company. Although no title or release date has been revealed, with that kind of star power it will bring the basketball icon to the forefront once again and undoubtedly fuel further sales of the Jordan Brand.
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