NBA Lockout to Cost Sneaker Brands $500 Million?


The NBA lockout didn’t sneak up on anybody. The league and its players have been saving their dinero and locking horns for years in preparation for the political maneuverings such massive negotiations seemingly require. But still, sneaker retailers and manufacturers seem surprised that their cash cow may have disappeared — even it just briefly.

Marshal Cohen, chief industry analyst at the worldwide market research company NPD Group, predicts that “Basketball shoe marketers such as Adidas, Nike and UA (Under Armour), and national retailers such as Foot Locker, could lose up to $500 million in sales if the 2011-12 NBA season is wiped out,” according to USA Today.

It is hard to believe that one quarter of the $2 billion basketball-shoe industry would simply run off since so many people are actually playing the game and would still need footwear, points out Matt Powell of sporting goods industry analyst SportsOneSource. He notes that “basketball sneaker sales were not badly hurt by the 1998-99 lockout and that 70% of the basketball-shoe industry is dominated by a guy who hasn’t actually played pro since 2003: Michael Jordan.[more]

“Where brands could get hurt is exposing consumers to new styles,” Powell said to the paper. He expects Adidas to be hurt the most if a lockout drags far into the season or manages to cause the whole thing to go up in smoke since it is in the middle of an 11-year contract to be the 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,” USA Today adds.

Adidas, though, tells the paper that its “basketball business grew 25% in the company’s last fiscal quarter”; that is most likely due to the “strong sales” of the new adizero Rose 2 shoes endorsed by current Chicago Bulls star Derrick Rose.

Still, something for those shoe companies to worry about is that “about 33% of all basketball shoes are purchased to play basketball,” according to Cohen and the rest are purely showpieces like any other shoe. “The impact (of a lockout) would be huge,” he said to USA Today. “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.”