Yahoo Lifestyle Analysts Give Nike Skims Deal a Thumbs-up — With Some Reservations
Nike is looking to Kim Kardashian to help it right its ship — and Wall Street appears to approve.
On Tuesday, the Oregon-based sports giant revealed that it was partnering with Skims, the intimates and loungewear company cofounded by Kardashian, to create a new brand targeted to women called NikeSkims. Nike’s stock closed up more than 6.2 percent to $77.59 on the New York Stock Exchange on Tuesday.
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This partnership marks a new direction for Nike, which has never created a brand with an outside company. It also revealed an inherent flaw within its own four walls, some analysts believe.
“On the face of it, this seems like a great partnership as it combines the reach of Nike with the intimacy and innovation of Skims,” said Neil Saunders, managing director of GlobalData Retail. “It should also help Nike create a lot more interest in women’s apparel and accessories, which is an area where it has been flagging and playing second fiddle to brands like Lululemon for a long time.
“That said, it is interesting that Nike felt the need to create a partnership rather than do this alone,” he continued. “In theory, Nike should have all the skills needed to drive its own brand in womenswear, but the reality is it has lost some of its ability to story-tell, innovate, and ‘wow’ consumers. Partnering with Skims remedies some of those weaknesses.”
But Saunders cautioned that both brands will need to double down to carve out a space in a segment of the market that is “already very crowded and where even brands like Lululemon are seeing slowing growth in North America because of market saturation.”
The equity research team at Jefferies was more positive and said it viewed the partnership “favorably” with “limited downside.”
In a report, the company wrote that the new brand “is a promising step forward in the fitness and activewear market, leveraging the strengths of Nike’s innovation and Skims’ inclusivity. Although we maintain our hold rating due to near-term headwinds, we see limited downside for Nike shares at current levels. In our view, the long-term potential for growth and market disruption remains compelling, making this collaboration a noteworthy development in the industry.”
NikeSkims is intended to invite more women into the world of sport and movement, the companies said. The first product from the long-term partnership is expected to be available this spring online and in select stores, with a global rollout planned for 2026.
Heidi O’Neill, president of consumer, product and brand for Nike Inc., said: “This partnership brings together the best of both brands and unlocks an incredible opportunity to disrupt the industry with our shared passion and commitment to innovation. We will invite even more athletes into sport and movement with product that makes them feel strong and sexy.”
Jens Grede, cofounder and chief executive officer of Skims, added: “Over the past five years, Skims has redefined the intimates and loungewear industry. Now, by partnering with Nike, the undisputed leader in athletic performance and innovation, we’re poised to create a new standard in the global fitness and activewear market. This partnership will empower individuals to express themselves authentically, merging Skims’ focus on body confidence and self-expression with Nike’s relentless pursuit of excellence.”
Kardashian said both companies “share a deep commitment to innovation, inclusivity, and pushing boundaries, driven by an unwavering belief in the power of women. This partnership is the culmination of that shared vision, delivering product that is meticulously designed to sculpt and perform for every body.”
The collection will encompass apparel, footwear and accessories.
Nike has been working for years to increase its reach among women and even ran its first Super Bowl ad in nearly 30 years centered around female athletes such as Caitlin Clark and Sha’Carri Richardson. At the same time, the company has been struggling to regain its momentum after a series of missteps under former CEO John Donahoe. He was replaced in October by Elliott Hill, who had retired after 32 years with the company, and returned to help reposition the business and regain the market share lost to competitors such as Hoka and On in the running space while supercharging its innovation engine.
The privately held Skims, which was launched in 2019 as an intimates brand centered around inclusivity, is now valued at over $4 billion. It has since expanded into swimwear and activewear and operates six stores. In 2021, Skims became the official underwear for Team USA’s women’s teams during the Summer 2021 Olympics and Paralympics in Tokyo. Given its high valuation, there continues to be speculation that Skims might seek an IPO this year after initially eyeing one last year.
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