Has Nike’s new ad handed Adidas the ball?
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Has Nike’s new ad handed Adidas the ball?

Dominion holding Adidas, the iconic German sneaker maker, may have just been handed the advantage by its main rival – athleisure giant Nike. The latter has embarked on a bold new advertising campaign which looks as though it may be misfiring. The new ad features Colin Kaepernick, the first National Football League (NFL) player to kneel during the national anthem in protest of racial inequality and police brutality. This is a deeply divisive issue, and the new ad has people online threatening to boycott Nike – and shop at Adidas instead.

Adidas’s share price has risen by 11% over the last 30 days

graph 0609 nike

SOURCE: Yahoo Finance

The source of the controversy is not the anti-racism message, or the accusations of police brutality (these stances may have their detractors, but they are relatively few and far between); but rather, the choice of the players who knelt to associate these issues directly with America itself, as expressed through the flag and the national anthem. America is a patriotic country (particularly its sports fans) and insults towards the flag and anthem rarely go down well. At present, there are calls for players who knelt to be fired, led by none other than the President of the United States, Donald J. Trump.

The advert’s strapline may prove to be ironically prophetic for Nike. It reads “Believe in something. Even if it means sacrificing everything.” In the aftermath of its publication, Twitter came alive with criticism, and the hashtag #BoycottNike was trending. Comments ranged from accusations that Nike was “un-American” to promises to return newly purchased trainers. Many critics said they would start shopping at Adidas instead.

Colin Kaepernick was willing to sacrifice his earnings for his political beliefs – has Nike misjudged the market and done the same thing?

Disclosure

Dominion holds Adidas in its Global Trends Luxury Fund.


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The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.