Jordan is one of the most influential brands within Nike. Indeed, the Jordan brand generated $6.59 billion in revenue for 2023, compared to $5.1 billion in revenue in 2022, and $4.8 billion in 2021. The Jordan brand represents 12.8% of Nike’s total revenue; this has become over 1/10 the size of Nike’s businessmodel, which also comprises Converse as a separate brand.
The Knight family owns Nike. Indeed, the top individual shareholder is Travis A. Knight, son of Philip Knight, co-founder of Nike, with a 7% stake in Class A stocks and a 2.4% stake in Class B stocks. On the other hand, the Knight family also controls the company tightly through their Trusts and an LLC called Swoosh (the Nike logo’s shape is a “swoosh”). Through individual shares, Swoosh LLC, and Travis Knight’s irrevocable trust, the Knight family controls over 97% of Class A and 21% of Class B stocks.
Nike follows a wholesale strategy combined with a very strong direct distributionstrategy. The company makes money primarily from footwear, which represented over 64% of its total revenues in 2023, followed by apparel (27%). The most successful Nike brand is the Jordan Brand, which in 2023 generated $6.6 billion in revenue. Nike is the master of demand creation and generation through its influencer campaigns, where athletes become an inspiration for everyday people.
Nike leverages both a wholesale and direct distributionstrategy. Indeed, while still in 2023, most sales come from wholesale distribution, in reality, since 2020, Nike has been ramping up its direct distribution through its NIKE stores and e-commerce platform (SNKRS).
Nike generated most of its revenue from footwear. Indeed, in 2023, Nike generated over $33.13 billion in revenue from footwear, $13.84 billion in apparel, $1.73 billion in equipment, and $2.43 billion from the Converse brand.
Nike generated $51.22 billion in revenue in 2023 and over $5 billion in net profits, compared to over $46.71 billion in revenue and $6.05 billion in profits for 2022.
Nike’s vision is “To bring inspiration and innovation to every athlete in the world.” At the same time, its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sports innovations, by making our products more sustainably, by building a creative and diverse global team, and by making a positive impact in communities where we live and work.”
Jordan follows a demand generation businessmodel, where its iconic brand works as a propeller for the sale of its footwear and apparel, that in 2022 generated more than $5 billion in revenue for Nike or more than 10% of its total revenue.
Converse is an independent brand part of Nike’s family of brands. Indeed, Converse generated $2.35 billion in revenue in 2022. And like Nike, it follows an heave Wholesale distributionstrategy, where most of its sales are made, through footwear. However, Converse follows also a direct distribution approach where it sells directly via its monobrand stores.
Michale Jordan is a billionaire but doesn’t own the Jordan brand, which is part of Nike. Yet, he gets 5% royalties on the sales of Jordan. For instance, as of May 31, 2023, Nike had endorsement contract obligations of $7.6 billion, of which over $330 million were to be paid out to Michael Jordan as royalties on the sales of Jordan in 2023 (the company made over 6$ billion in sales in that year). We estimated that between 2018-2023 alone, Nike paid (or is paying) Michael Jordan over one billion dollars in royalties for Jordan’s brand sales.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
