NBA Lockout Could Cost Shoe Companies $500 Million in Lost Revenue
The ongoing NBA Lockout could have a half-billion dollar effect on the sneaker market, a recent report by USA Today claims.
According to USA Today, National retailers such as Foot Locker and major footwear brands — including Adidas, Nike, and UA — could lose up to $500 million – roughly 25% of the $2 billion basketball sneaker market – in sales if the 2011-12 NBA season is wiped out, says chief industry analyst Marshal Cohen of the NPD Group.
“The impact would be huge,” Cohen told 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.”
About 33% of all basketball shoes are purchased to play basketball, Cohen told the Today adding “that leaves 67% of the sales from consumers going for the association with an endorser such as Nike’s LeBron James— or with the NBA itself,” Cohen said.
Despite Cohen’s figures, Matt Powell of SportsONE Source, told USA Today — and the Portland Business Journal last month — that the fear and figures are over blown.
“Kids are still going to play basketball and they’re going to need shoes regardless whether the NBA plays or not,” Powell said, noting that the last significant NBA work stoppage in 1999 had no material impact on basketball shoe sale. “Where brands could get hurt is exposing consumers to new styles.”
By his estimates, Powell says that Adidas AG – currently in its fifth year of a reported $400 million, 11-year deal to be the NBA’s official uniform and apparel supplier – would be the company most affected by the NBA lockout, potentially losing up to half of its $250 million to $300 million in sales generated annually from licensed NBA merchandise.
Will the lockout stop you from purchasing your favorite player’s sneakers?
via USA Today