MW Nike is the Dow's best performer today, after joining forces with Kim Kardashian. But celebrity collabs aren't a guaranteed fix.

By Bill Peters and Weston Blasi

Analysts say partnership is 'step in the right direction.' But some analysts note Nike's past difficulties winning over female customers.

Shares of Nike Inc. rallied on Tuesday after the athletic-gear giant said it would join forces with Kim Kardashian's SKIMS shapewear clothing brand to launch a new line of fitness gear this spring, as it tries to broaden its appeal to women following a drop in its stock price last year.

The stock was up 5.5% on Tuesday, putting it on track to be the Dow Jones Industrial Average's DJIA best performer for the day.

The new fitness gear from the companies will be called NikeSKIMS and will include clothing, footwear and other accessories. The brand will launch its first products at select stores and online in the U.S. this spring, with a worldwide expansion coming next year.

The move brings together Kardashian's rapidly growing clothing brand - which she co-founded in 2019 and which was valued at $4 billion in 2023 - with a company trying to find its footing with athletes and female consumers, after shifting approaches and higher costs of living over recent years that have weighed on apparel and sneaker demand. Over the past 12 months, Nike's stock has fallen around 26%.

In a release, Nike $(NKE)$ said the collaboration would "bring something new and unexpected to an industry that is craving something different, and to invite a new generation of women into fitness with disruptive product designed to meet their needs in both performance and style."

The company said SKIMS had proposed a shared product line, but Nike "saw an opportunity for something even bigger, making way for NikeSKIMS." Nike said NikeSKIMS "is inspired and informed by athletes, sport and the female form."

Nike's new chief executive, Elliott Hill, has said he wants product design to be more directly informed by athletes, and has said the company has lost its "obsession with sport." Others have worried that the company deluged the market with throwback sneakers, diluting its relevance in the process.

Hill became CEO last year, replacing John Donahoe. But analysts have said the company's turnaround plans could take time to materialize. Nike also made the announcement as celebrity brands make for bigger competition to their legacy counterparts, and as online influencers shorten trend cycles.

Jefferies analyst Randal Konik, in a research note on Tuesday, said that against that backdrop, the partnership with Kardashian was a "step in the right direction." But he stopped short of taking a more optimistic stance on the stock.

"We view the NikeSKIMS partnership favorably on the grounds that it is a promising step forward in the fitness and activewear market, leveraging the strengths of NIKE's innovation and SKIMS' inclusivity," he said.

"Although we maintain our Hold rating due to near-term headwinds, we see limited downside for NKE shares at current level," he continued. "In our view, the long-term potential for growth and market disruption remains compelling, making this collaboration a noteworthy development in the industry."

Matt Powell, Spurwink River's retail expert and a former senior sports-industry advisor, said Tuesday's announcement was a smart move, but he also said fixing Nike's problems wouldn't happen overnight.

"This collaboration does not solve all of Nike's issues with women, but it is a step in the right direction," he said.

He said that in the past, Nike tended to prioritize men over women. It suffered from a lack of clarity, which allowed yoga-wear maker Lululemon Athletica $(LULU)$ to attract more female shoppers, he said. And he said most of Nike's performance shoes geared toward women were often just men's shoes sized down, leading to less-comfortable fits.

He noted that Nike paid for its first Super Bowl commercial in nearly three decades - an ad that featured WNBA's Caitlin Clark, star track athlete Sha'Carri Richardson, U.S. soccer star Sophia Wilson and reigning WNBA MVP A'ja Wilson.

David Daniels, an Alabama-based apparel and sneaker content creator who goes by SneakerPhetish on social media, said that interest in the deal would likely be big. While he said the partnership would give SKIMS access to a massive Nike fanbase, he said celebrity collaborations don't always work.

"There still needs to be quality and value within the product being endorsed by the celebrity or it can fall flat with the target audience," he said.

He noted that a multi-year collaboration between Beyoncé and Adidas (XE:ADS)ultimately didn't work. The two agreed to part ways in 2023, amid apparent "major creative differences," according to a Hollywood Reporter story at the time.

However, the rapper Travis Scott, who has collaborated with Nike, was a "known sneakerhead" better able to connect with other sneakerheads, Daniels said.

"We want to see you in the product," he said.

-Bill Peters -Weston Blasi

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February 18, 2025 15:34 ET (20:34 GMT)

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