Lee Roach
@leevalueroach
ยท
10h
My wife left me today. She said “it’s the Nike thing.” I said Nike is a $100 billion brand that fired its own retailers and got out-run by a Swiss company named after a preposition, and the only person on Earth who can save it is Sydney Sweeney in a swoosh, and she said “I’m taking the Hokas.”
Let me explain to you what I was trying to explain to her.
In 2020 Nike hired a software guy. Software guy looks at fifty years of owning every wall in every Foot Locker in America and says “what if we sold shoes like Salesforce.” They called it Consumer Direct Acceleration. Nike fired Foot Locker. Fired DSW. Fired Macy’s. Fired the guy at the mall who’s been lacing Air Maxes since Reagan. And that guy didn’t die. He just put Hoka on the wall.
She said “you don’t even run.” I said NOBODY WHO BUYS HOKAS RUNS, THAT’S THE ENTIRE BUSINESS MODEL, and she started packing.
Here’s what the software guy didn’t understand. Wholesale isn’t a channel. Wholesale is shelf space. Shelf space is real estate. You don’t abandon real estate in a mall. You abandon it TO SOMEONE. Nike left the wall and On, New Balance, and a running shoe that looks like a Wi-Fi symbol moved in. Nike’s app pushed me a meditation playlist. The brand that told me to Just Do It now wants me to Just Log In.
Also the ads became TED talks. Every spot was a journey. Nobody wants a journey from a shoe. A shoe has one job: make me feel like I could beat someone. Nike replaced “beat someone” with “reflect.” Ask the stock how reflection went. It lost more than half its value from the 2021 high and the new CEO is now crawling back to Foot Locker like a guy who left his wife for a startup and the startup was an app.
She said “that’s you. That’s literally what you’re doing right now.” I said I’m not crawling, I’m explaining the setup.
THE SETUP. American Eagle put Sydney Sweeney in jeans, made one pun, and the stock ripped like a meme coin in a mall. That is the entire trade. Nike doesn’t need a Vision. Nike doesn’t need a Transition Year. Nike needs 30 seconds, Sydney Sweeney, one bad pun about a swoosh, and every man in America aged 25 to 50 with a Robinhood account will personally rebuild the Foot Locker wall with his hands.
Until then it goes lower. Every “reset.” Every “we’re encouraged by early signs.” Every earnings call is another Hoka on a shelf that used to be a Nike.
She said “I hope Sydney Sweeney is worth it.” I said she’s worth roughly 400 basis points of shelf share at Dick’s and she closed the door.
Anyway I’ve got a Foot Locker floor plan from 2016 taped above the bed, a pair of Pegasus 36s I’m not allowed to retire until the stock reclaims its highs, and nobody left to explain it to.
So it’s you now. Buckle up. Sydney, if you’re reading this, the swoosh needs you. So do I.