In his 2016 memoir Shoe Dog, comfortably the best book ever written about selling a pair of runners, Phil Knight talks about first getting to know Steve Prefontaine. It was at the US Olympic trials in 1972, a year after Knight relaunched his small running shoe company Blue Ribbon Sports under the brand name Nike.
Blue Ribbon had originally imported Onitsuka runners from Japan, but Knight had a new marketing tactic in mind with Nike.
“By then Prefontaine was universally known as Pre and he was far more than just a phenom, he was an outright superstar,” wrote Knight. “Pre was unlike any athlete this country has ever seen, though it was hard to say exactly why. I’d spent a lot of time studying him, admiring him, puzzling about his appeal.
“Sometimes I thought the secret to Pre‘s appeal was his passion. He didn’t care if he died crossing the finish line, so long as he crossed first. He pushed himself to the brink and beyond... No matter the sport – no matter the human endeavour, really – total effort will win people‘s hearts.”
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All this came to mind this week, rereading Shoe Dog, alongside some of the recent grim reading about Nike‘s tumbling running sales and stock values, and how the company could badly do with another Pre right now.
The original “Just Do It”, Pre was only 21 at the time and turned out to be the headline act at those US trials. Wearing a pair of custom-built Nike designed by Bill Bowerman and now decorated with a “swoosh”, Pre won the 5,000m from gun to tape in an American record of 13:22.8. It earned his ticket to the Munich Olympics a month later.
Knight was utterly inspired: “Walking back down Agate Street I knew that race was part of me, would forever be a part of me. In our coming battles, with Onitsuka, with whomever, we‘d be like Pre. We‘d compete as if our lives depended on it... Because they did.”
A month later in Munich, Pre finished fourth in the 5,000m, narrowly outsprinted for bronze by Britain’s Ian Stewart. He‘d run from the front for most of the last four laps and was inconsolable at the finish, convinced he was done with running.
Knight and Nike changed his mind. Athlete endorsements were banned in track and field, so Nike hired him in 1973 as their national director of public affairs, on a modest salary of $5,000 a year. One of the first things Pre bought himself was a Butterscotch MG.
Sadly, Pre didn’t have long to live
“I remember thinking Pre was the living, breathing embodiment of what we were trying to create,” Knight recalled. “Whenever people saw Pre going at his breakneck speed – on a track, in his MG – I wanted them to see Nike. And when they bought a pair of Nikes, I wanted them to see Pre.”
Knight also joked about the time Nike missed out on signing a rising tennis star named Jimmy Connors, in the summer of 1974, after he surprisingly won Wimbledon and then the US Open. “Disappointing, we all agreed. Besides, we all said, we‘ve still got Pre. We‘ll always have Pre.”
Sadly, Pre didn’t have long to live. He was killed in a car accident 50 years ago in the early hours of May 30th, 1975. He‘d just won his last 5,000m race, before crashing his MG into a rocky roadside ditch while returning from a celebratory party in the hills outside Eugene, Oregon. Pinned beneath the wreck of his car, he was pronounced dead at the scene.
Fifty years on, the once-breakneck speed of Nike‘s growth has slowed to a crawl. Its current market value of $90.51 billion is down from a peak of $281 billion in November 2021, and its stock was the Dow’s second-worst performer last year. That stock value is today worth $60.21, miles off the high-water $177.51 in November, 2021.
Nike‘s sales have also tumbled for four straight quarters, falling nine per cent year-on-year according to the latest quarterly return. Gross margins also fell to 41.5 per cent in the same quarter and Nike‘s earnings are now expected to fall by over 46 per cent this year.
In China, Nike sales fell 17 per cent in the most recent quarter, while domestic brands like Anta and Li-Ning are racing ahead
No wonder they have been scrambling around to figure out why. During the Covid pandemic, under then CEO John Donahoe, Nike made a deliberate decision to focus on sales through its own online channels, cutting back on wholesale sales. This worked wonders while people were confined to their homes, but it backfired once shoppers returned to stores after the pandemic, where the Nike products weren’t well stocked.
Last September, Nike announced that Donahoe was retiring and they brought back Elliott Hill as their new CEO, a Nike veteran of over 30 years. “We‘re beginning to drive a more diversified portfolio,” Hill said recently. “It will take time to reach the volume to replace the handful of classic franchises we over-indexed, but our approach is simple – help consumers fall in love with something new from Nike.”
Easier said than done. Those same consumers are fast falling in love with other brands, including long-time rivals Adidas and Puma, along with newer names such as New Balance, Hoka, and On Running, the increasingly popular Swiss brand which has benefited from some heavy investment by the likes of Roger Federer.
Since Adidas appointed new CEO Bjørn Gulden in 2023, their stock price is up 74 per cent. They’re also focusing more on the European market, sponsoring an increasing number of athletes and federations, including Athletics Ireland.
In China, Nike sales fell 17 per cent in the most recent quarter, while domestic brands like Anta and Li-Ning are racing ahead. Donald Trump’s dreaded tariffs are another problem, given Vietnam, Indonesia and China supply the majority of Nike products.
There‘s bad news too on the super shoe front, where Nike‘s once unrivalled Vaporfly range is also falling behind. Puma’s new Fast-R Nitro Elite 3 was recently declared by independent studies to be the fastest on the market.
Earlier this month, Nike announced a new signature line of runners endorsed by Olympic champion Jakob Ingebrigtsen, who shares many traits with Pre in how he races. But maybe the problem for Nike is that there can only ever be one Pre.
