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Nike to Launch New Women's Fitness Brand with Kim Kardashian's Skims

The logo of Dow Jones Industrial Average stock market index listed company Nike (NKE) is seen in Los Angeles, California, United States, April 12, 2016. (Reuters)
The logo of Dow Jones Industrial Average stock market index listed company Nike (NKE) is seen in Los Angeles, California, United States, April 12, 2016. (Reuters)
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Nike to Launch New Women's Fitness Brand with Kim Kardashian's Skims

The logo of Dow Jones Industrial Average stock market index listed company Nike (NKE) is seen in Los Angeles, California, United States, April 12, 2016. (Reuters)
The logo of Dow Jones Industrial Average stock market index listed company Nike (NKE) is seen in Los Angeles, California, United States, April 12, 2016. (Reuters)

Nike will launch a new women's activewear brand in the US this spring in partnership with Kim Kardashian-owned shapewear clothing company Skims, as CEO Elliott Hill works to bolster its portfolio to better compete with upstart brands.

Product innovation and a return to focus on its core sports roots have been at the forefront of Hill's mission to revive sales at Nike, which have been lagging strong growth at Hoka and New Balance, Reuters reported.

The company's bid to appeal to women, who made up about 40% of its customers in 2023, was evident in Nike's first Super Bowl ad in nearly three decades, featuring star women athletes including Jordan Chiles, Caitlin Clark, Sha'Carri Richardson, A'ja Wilson and Sabrina Ionescu.

Skims was launched in 2019 and is valued at around $4 billion. It has seen a strong demand for its shapewear.

Nike said on Tuesday the new brand, called NikeSKIMS, would include training apparel, footwear and accessories for women.

The first collection will be launched at some retail locations in the US as well as at NikeSKIMS' website. The brand would launch globally in 2026, expanding into more retail locations, as well as in the wholesale segment.

The brand would sit alongside other names under Nike's kitty, including Converse, Jordan, ACG and Nike SB.

Nike's shares were up 3% on Tuesday.

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Nike Trips as Forecast of Another Sales Decline Dims Quick Turnaround Hopes 

Nike shoes are seen displayed at a sporting goods store in New York City, New York, US, May 14, 2019. (Reuters)
Nike shoes are seen displayed at a sporting goods store in New York City, New York, US, May 14, 2019. (Reuters)
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Nike Trips as Forecast of Another Sales Decline Dims Quick Turnaround Hopes 

Nike shoes are seen displayed at a sporting goods store in New York City, New York, US, May 14, 2019. (Reuters)
Nike shoes are seen displayed at a sporting goods store in New York City, New York, US, May 14, 2019. (Reuters)

Nike shares slipped nearly 6% premarket on Friday after the sportswear giant warned of another quarter of sales decline, leaving some investors worried about the pace of a crucial turnaround under new CEO Elliott Hill.

The company on Thursday forecast a steeper-than-expected drop in fourth-quarter revenue and also reported a 17% slump in China quarterly sales amid weaker discretionary spending in the country.

Hill - who took on the role in October to help the sportswear maker regain lost market share - has laid out what he called a "Win Now" strategy, which includes boosting on-the-ground presence in five key cities including Shanghai and Beijing.

"It is too early to be confident in the turnaround," Sheraz Mian, director of research at Zacks Investment Research, said.

The new management will take time to rebuild relations with other retailers that were weakened by its focus on selling directly via its stores and website and develop a more compelling line of products, he said.

Nike shares are down about 11% since Hill's CEO announcement in September, giving up all the gains following his appointment.

To be sure, Hill has fast-tracked certain sneaker launches such as Pegasus premium and Vomero 18 that helped lift sales in the reported third quarter. Still, Nike is working to move past the previous management's strategy missteps that led to a lack of innovation for its product lines.

Nike's Chief Financial Officer Matthew Friend said the company would take "several quarters" to clear out its dated stock, which would involve margin-hitting discounts.

"Nike is emerging from quite a deep hole from prior management in terms of excess inventory, lack of innovation and brand equity, which we expect will take multiple seasons to correct," Barclays analyst Adrienne Yih said.

Analysts at Barclays also projected that the earliest they foresee a turnaround is in the second half of Nike's fiscal year ending May 2026.

The company's forward price-to-earnings ratio for the next 12 months, a benchmark for valuing stocks, was 30.08, compared with 17.33 for Deckers and 25.91 for Adidas.

"We continue to like the recovery story but don't expect to see much short-term progress," Bernstein analysts said.