By Katherine Masters and Ananya Mariam RajeshMarch 21 (Reuters) – Nike has more and more leaned on its iconic basketball sneakers to spice up gross sales, however because the sportswear large bleeds market share to newer manufacturers, some analysts and traders are questioning if that could be a mistake.Shares of the retailer have been down 5.6% in prolonged buying and selling on Thursday after a post-earnings convention name by which executives acknowledged Nike had misplaced share in trainers, a class that has surged in recognition during the last yr.Nike CFO Matt Buddy informed traders the corporate was chopping again on provides of “traditional” sneakers, together with the corporate’s Air Pressure 1 sneakers, to deal with upcoming launches and new product improvement.The transfer is a significant shift for Nike in comparison with 5 years in the past when basketball sneakers from the Jordan model and court-inspired types such because the Air Pressure 1 and Nike Dunk drove the corporate’s sneaker gross sales. Nonetheless, customers have new favorites out there like On and Deckers-owned Hoka, which have grabbed extra shelf house globally.”If we do a autopsy, possibly there’s been an excessive amount of reliance on legacy or historic product,” mentioned Jim Tierney, chief funding officer of Concentrated US Development Equities at AllianceBernstein, which owns Nike shares.Nike Air Jordan sneakers, first produced for U.S. basketball star Michael Jordan throughout his time with the Chicago Bulls, have been launched in 1985. The sneakers quickly grew to become a worldwide craze thanks partially to advertisements that includes Jordan and filmmaker Spike Lee with the tagline “It is gotta be the sneakers.”Information from analytics agency Altan Insights, which research the collectible sneaker market, exhibits that Nike doubled the variety of Air Jordan 1 Highs launched by means of its SNKRS app between 2019 and 2023 and greater than tripled the variety of Nike Dunk Lows launched over the identical interval.Whereas Nike doesn’t report what % of its complete revenues come from Jordan, the model accounts for roughly 16% of the retailer’s wholesale revenues, in keeping with Nike’s fiscal 2023 annual report – up 29% in comparison with the earlier yr.Story continuesBut the rising recognition of newer manufacturers akin to On and Hoka, in addition to established sportswear gamers like New Stability suggests the significance of Jordan gross sales has turn out to be a legal responsibility for the corporate, analysts mentioned. One drawback is shifting shopper tastes, in keeping with Stifel analyst James Duffy.On’s market share at Dick’s Sporting within the footwear class elevated to eight.2% in February from the 6.1% it had in October 2023, whereas New Stability noticed its market share rise to five.4% from 4.6% for a similar interval.That is in distinction to Nike’s Jordan whose market share on the retailer has hovered over solely 5% from October to February, in keeping with YipitData, which collates market share utilizing e mail receipt and transaction information.In a Sunday observe, Duffy wrote that “retro footwear traits are shifting from courtroom types (by which Nike is obese) in the direction of chunky dad sneakers and terrace types.” That has allowed rivals akin to New Stability and Adidas, with its best-selling Samba sneakers, to attract consumers who may need in any other case turned to Nike as a trend alternative.Nike’s newer basketball shoe releases haven’t had the identical recognition with consumers as its retro types, in keeping with Jane Hali & Associates senior analyst Jessica Ramirez. Its latest entry, the Guide 1, named for NBA star Devin Booker, “didn’t get an excellent assessment and is a really casual-looking shoe” as a substitute of a performance-driven basketball shoe, Ramirez mentioned, referring to the class for exercise or sports activities sneakers.To make certain, sure types of Nike basketball sneakers, together with the Air Jordan 11 Retro, are at the moment on development, although not as efficiency sneakers. “The rationale we’re seeing all these promotions in Nike’s non-retro basketball types is as a result of they don’t seem to be a trend uniform the way in which carrying a pair of 11s is,” mentioned Williams Buying and selling analyst Sam Poser.The Air Jordan 1 Mid SE, often priced at $135, was discounted $87.97 on Nike’s U.S. web site as of Thursday, whereas its low-top Dunks promote for $115 and high-top variations promote for as much as $165. Low-top Air Jordan 11s, a non-retro fashion, are at the moment decreased from $130 to $97.97.Nike shares have misplaced 16% of their worth during the last 12 months whereas Deckers shares have greater than doubled. Nike executives have highlighted upcoming merchandise within the working class to compete with On and Hoka, whose sneakers have turn out to be common with consumers who put on them to the workplace in addition to on runs.Tierney mentioned traders are additionally hopeful that upcoming trend shoe launches, such because the Nike Air Max DN, which can value at $160, will counteract the slowdown in Nike’s retro enterprise.”I believe the subsequent six months are crucial,” he mentioned. “We all know that newness is coming, but when it would not take off now, I believe traders will ask the query, ‘then when?'”(Reporting by Ananya Mariam Rajesh in Bengaluru and Kate Masters in New York; Enhancing by Josie Kao)