NBA Lockout Could Cost Shoe Companies $500 Million in Lost Revenue

by October 31, 2011

We’ve seen all kinds of clever ads during the NBA lockout from shoe giants, but the reality remains that without actual basketball games happening, it’s hard to get people to buy signature kicks. Reports USA Today: “Basketball shoe marketers such as Adidas, Nike and UA, and national retailers such as Foot Locker, could lose up to $500 million in sales if the 2011-12 NBA season is wiped out, says Marshal Cohen, chief industry analyst at the worldwide market research company NPD Group. That’s roughly 25% of the $2 billion basketball sneaker market, Cohen said. About 33% of all basketball shoes are purchased to play basketball, Cohen said. That leaves 67% of the sales from consumers going for the association with an endorser such as Nike’s LeBron Jamesβ€” or with the NBA itself, Cohen said. ‘The impact would be huge,’ he said. ‘Out of sight, out of mind. If the players are not on the court, and the kids aren’t thinking about them, they’re not going out and getting their shoes.’ Matt Powell of sporting goods industry analyst SportsOneSource thinks the retail fallout from a lockout is overblown. Basketball sneaker sales were not badly hurt by the 1998-99 lockout, he said. He cites a different impact. ‘Kids are still going to play basketball and they’re going to need shoes regardless whether the NBA plays or not,’ Powell said. ‘Where brands could get hurt is exposing consumers to new styles.’ Powell notes that Nike’s Jordan brand controls 70% of the business, and Michael Jordan hasn’t laced them up on an NBA court since the last lockout. The company hit hardest, Powell believes, would be Adidas, which is about halfway through an 11-year deal as official outfitter of the NBA. Powell estimates Adidas could lose up to half of its $250 million to $300 million in sales generated annually from licensed NBA merchandise.”