Nike SB

Many people reading this will be growing up in a world where Nike SB is the first name they think of when it comes to skate footwear. Many others however, will be amazed that we live in such a world…

This is the first in a two-part editorial post. Part 1 focuses on Nike SB’s rise to the top, and Part 2 will focus on what the crop of other skate shoe brands can do to compete with the SB juggernaut.

First, a few qualifying statements. This editorial isn’t full of new and revolutionary ideas. Several articles have been written on the subject, most notably in TWBiz and the excellent book Made for Skate. My attempt is to collate and color with my own thoughts on how the worlds largest sporting goods company was finally able to not only crack the exclusive skate shoe market, but rise to the very top in a few very short years.

With that out of the way, let’s examine some truths…

• For many pure skate shop owners, SB’s have become their best selling SKU. Shop buyers are lining up to buy whatever Nike puts out, and are often placing orders for Nike’s when they used to order Vans, Etnies, etc. (arguably the brands that kept them alive or got them going during the 80/90′s depending on how long they’ve been around)
• This is Nike’s 3rd or 4th attempt (depending on how you count) at entering the skate shoe market. imagine that as 3 or 4 failed independent start-ups. That’s a lot of $$$$ down the drain. They really wanted to make this thing work.
• Nike’s ultimate breakthrough into the skate footwear market is an interesting case study in itself. The short version has 3 factors, 1). very controlled distribution. ie. they made the product seem very exclusive and made a huge effort to only get them into what they regarded as “key accounts”. 2). The coincidental timing of the Dunk regaining popularity combined with the subsequent release of the “SB Dunk”, and 3). The fact they actually put together a decent team and creative marketing around it. Those 3 things laid the groundwork for Nike SB’s dominating run in skateboarding footwear.
• They have more experience and greater access to the materials and factories used in shoe manufacturing than anyone else in the entire sporting goods industry (note that I didn’t say “skate industry”). The general consensus is that their products are superior because of this fact (a fact I still think is very debatable).
• They own both Hurley and Converse. As you may have read on the site, they’re also rumored to being going after DC which is currently owned by Quicksilver. They clearly see the “action sports” market continuing to grow and are pretty clear that they want in for the long haul.
• If Nike didn’t sell another skate shoe after today, it wouldn’t matter one bit to their bottom line

Credibility

Credibility, is an interesting thing. If there’s one thing Nike SB still struggles with, it’s legitimate credibility among the core skateboard culture. Cynics will say that skateboarding the corporation took over skateboarding the culture a long time ago, but others (including this author) will beg to disagree.

The credibility case is simple to explain. Nike is a large multinational corporation. It isn’t owned or founded by skateboarders. It has no roots in skateboarding or even action sports culture, and as mentioned above it only recently started making specific skate footwear. So the skeptics argument continues…Nike is a public company that needs to produce good financial results every quarter to keep The Street and its shareholders happy. It needs to show that it is still growing and that it understands the major trends in the sporting goods industry. Therefore Nike simply see’s its involvement in the skateboarding/action sports world as a sound business decision. A strategic play if you will, and nothing more. If skateboarding/action sports weren’t growing, weren’t icons of pop-culture, and if Dew Tours and X-Games didn’t exist, they wouldn’t be here and they wouldn’t give a shit about this market. Sound about right? Well, I’m sure a few folks might disagree, and will probably cite the talent that have been brought in to run Nike SB up in Beaverton. Sure they get their checks from the fruits of selling many many Jordans and Manning jerseys, but they’re trying to build something real in skateboarding, something that will last, and something that ultimately has some longevity and, of course credibility.

Only time will tell whether the skeptics or the disciples are correct, but regardless what we know today is that SB have become very very successful.

Nike SB isn’t alone however when it comes to facing credibility issues. As an example, Vans is now owned by VF, a North Carolina based conglomerate that also owns Wrangler, Lee Jeans, The North Face, Jansport, Eastpak, and Nautica to name a few. VF corp did just over $7 billion in revenue last year, compared to Nike’s $18.6. Compare that to Quicksilver’s $2.2 billion which includes their core brands, plus the ski/snowboard divisions, and I’m sure DC’s revenue share is less than half of the total. Either way you slice it, VF is big, even next to Nike. Yes, Vans is still based in Cypress, but arguably the oldest of the “old skool” are part of very large company now and you better believe that the folks in NC are watching over every move and take up most of the seats at the board.

So maybe credibility isn’t such a big deal after all. If a company that also manufactures Lee Jeans can sell thousands of skate shoes every year and hold a ton of respect while doing so, then the biggest sporting goods brand in the world should have no trouble holding a legit position in the market. If we agree that’s the case, then what’s left for the rest of the skate shoe brands??? Well it turns out, a lot. Tune in to part 2 to find out what exactly.

Sneaker Freaker posted a nice interview with Nike SB Zoom Veloce designer, James Arizumi. It’s a quick but interesting read. James talks about the inspiration for the Veloce, as well as its similarities with the Zoom Tre A.D. He also discusses the overall skate shoe design philosophy up in Beaverton, and where the Nike SB line-up is heading this year and beyond. Check out the full article here.

Not strictly a skate shoe, but we thought we’d cover this one anyway…Nike 6.0 goes fully vulcanized on the Drifter, pictured below:

Calling itself “inspired by skateboarding”, the Drifter has a rubber sole matched with a simple suede upper. As far as we know this is Nike’s first fully vulcanized shoe. Can’t say we didn’t see this one coming. Look for it in stores later this year. Check out Vagant for more pics.

Transworld Biz is reporting on a rumor that Quicksilver might be selling DC Shoes to conglomerate VFC (owner of Vans, Reef, The North Face, etc.). According to the article:

Citi group reiterated a buy recommendation on Quiksilver (ZQK) saying “VFC may be close to acquiring skate brand DC Shoes from Quiksilver (NYSE: ZQK), according to WWD reports on Friday. We think this could be a positive acquisition for four reasons: 1). The brand fits well within VFC’s newly created Action Sports Americas coalition, and we think there are opptys to create synergies w/ its Vans & Reef brands; 2). VFC will leverage its global sourcing and distribution to further grow the brand like previous acquisitions; 3). VFC is likely to get an attractive price as a result of market valuations and ZQK’s balance sheet, and; 4). We think the deal would be slightly accretive, w/out impacting VFC’s dividend or our est. of ~$200M in repurchases for FY09.”

“Short-Term Potential Positive for ZQK, But Long-Term Impact Uncertain — The possible cash infusion for ZQK is important as the company needs to refinance its short-term debt, including $167 million which is uncommitted, and a $72 million facility due to mature in March 2009. However, with the possible sale of DC, we think Quiksilver could be losing its growth crown jewel.”

Our opinion on this one is pretty simple. Quicksilver is clearly hurting and desperate times call for desperate measures. Selling what is arguably the crown jewel of their current business isn’t an easy decision, but they might not have much choice if they want to survive. A weak market combined with the disastrous 2005 purchase of ski maker Rossignol have weighed heavily on Quicksilver. On the other hand, VFC is a well managed company with a decent cash position. At today’s prices they can’t afford to sit on the sidelines, so when a skate industry staple like DC comes on the market, you can be sure they’ll be in the hunt.

The other half of this story is a bit more vague, but slightly more juicy. According to the OCBJ, there’s a rumor that Quicksilver already turned down an offer from Nike for all or part of DC Shoes. Personally, I’m not really buying this one. Maybe a few years ago, but not today. Why would Nike feel the need to purchase DC? They already have (albiet after a few attempts) a high-performing skate unit (Nike SB) plus a successful presence in action sports (Nike 6.0). Therefore, unlike the Hurley acquisition of a few years back, buying DC doesn’t get them anything new.

On the other hand, one could argue that the Converse acquisition in 2003 didn’t get them anything new either. What it did get Nike however was another unmistakable brand, so maybe that’s what they were looking for by going after DC…

The title pretty much says it all on this one. Seemingly out of thin air, Nike SB releases a limited edition P-Rod II High-top in Brown Houndsooth no less.

To be honest, we’re not quite sure what to make of this one. We’ve seen the houndsooth pattern on shoes before (hell, even on Nike’s), but we haven’t ever seen it looking this…shall we say, debonair! Either way, in a limited run at select retailers we’re pretty sure these will sell like hotcakes. So grab em’ while you can old chap!

Thanks to KicksOnFire for the original scoop.

Skateboarder Mag is reporting a few more details on the upcoming addition to the Nike SB line, the Veloce.

According to the article the Veloce:

“comes with a sleek classic upper, clean forefoot and toe down and minimal layering that are still protected by a stitch and turn toe cap. The upper is slim and form fitting with embroidery and TPU details that match up nicely with the fast design lines. All this built on the same tooling as the Zoom Tre A.D. ensuring the tech side of the shoe is also covered. 2 colors will be launched this January with a follow-up in March.”

We’re not sure who wrote this description, but aside from the odd gramatical error it seems pretty legit. As for the shoe, it’s one we’ve seen a few samples of leading up to the launch. Overall we liked what we saw then and that hasn’t changed. White/red and black/white launch colorways seem a bit on the safe side, so maybe Nike is taking this one slow.