A few months ago, fears of the Coronavirus in North America were met with eye rolls, gasps of bewilderment, and of course, memes. Now, the virus has become a fully-fledged pandemic that has the world at a standstill. As of writing this article, there are over 144,000 cases and just under 5,400 deaths. Due to the fears surrounding the spread of the virus, numerous institutions have completely shut down as a way to enact social distancing measures. Some of the biggest institutions to do this are sports leagues like the NBA, NHL, MLB, and even racing leagues like NASCAR and Indy Car.
COVID-19 has had massive implications on the economy as well. For instance, the stock market has been in freefall this past week with some comparing it to the Great Depression. Hyperbole aside, there is no denying that the state of affairs has been sad to say the least. One of the industries that many have overlooked over the last week is sneakers and sportswear. Admittedly, consumer goods like these ones should be taking a rightful backseat to the health of our population. Regardless, it’s worth taking a look at how the Coronavirus has completely ravaged the sneaker world and how there could be some ripple effects throughout the next couple of months. In fact, we’re already starting to see some now.
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Let’s start with the obvious. A couple of weeks ago, we reported that Nike saw a massive hit in its market value. Essentially, their market valuation took a 17 percent nosedive due to a lack of sales in China. The virus played a massive part in this as China was on lockdown for a few weeks. Nike stores were closed all around the country and manufacturing took a large dip as well. China continues to be one of the fastest-growing markets in the world and when it’s struggling, businesses feel it. In addition to Nike’s value, their stocks also took a beating. On March 12th, Investor’s Business Daily reported that Nike had an 11.7 percent decline. As you can imagine, Nike isn’t the only one hurting here. In that same report, it was noted that Adidas stock went down by 14.3 percent while Under Armour and Foot Locker dropped 14.85 and 14 percent, respectively. When it comes to sales, Adidas and Puma have taken large damages in China with the former seeing a first-quarter sales decline of $1 billion, according to The Guardian.
To make matters worse, Nike recently had one of its employees contract the virus, which led to the shutdown of its European headquarters in the Netherlands. This is a bigger problem than one may initially think, as there are 2,000 employees on the campus. When you combine the economic downfall and the risk the virus poses to employees, you are left with an impossible situation that has left many of these companies in a state of limbo and sneakerheads are already starting to feel the effects.
While the two haven’t explicitly been linked, there is no denying the correlation between the stoppages posed by the virus and the recent delays in release dates for high-profile sneakers. For instance, numerous Air Jordan models have seen their release dates pushed back by at least a couple of weeks. For instance, the Air Jordan 5 “Fire Red” was supposed to drop on March 28th and it was ultimately pushed back to April 25th. The Air Jordan 5 “Top 3” was going to come out on May 16th but got suspended until May 30th. Some of the other models that were delayed by two weeks or more are the Air Jordan 4 “Court Purple,” Air Jordan 13 “Flint,” Air Jordan 6 “DMP,” and Air Jordan 11 Low “Bred Concord.” In the grand scheme of things, these delays don’t mean much. However, if you’re paying attention to the sneaker industry, these delays could lead to a trend seen across various brands.
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For instance, Nike is set to celebrate Air Max Day on March 26th. This will see various new models find their way onto the market and for now, it seems like Nike is planning to go through with the drop, as per usual. These plans could very well change within the next week, especially if the virus worsens. If supply chains continue to get effected, all while stores continue to close, Nike and many other brands may cancel their planned drops entirely.
Another factor that could affect the sneaker industry right now is the concept of social distancing. At this point, many people are only leaving their houses if they have to. When you leave your house, it’s either to go to work or to go to the grocery store to stock up on supplies. With this in mind, not very many people are going to sneaker stores right now. This could lead to even more massive dips in sales which would ultimately deter brands from dropping new releases — at least for the time being.
Once again, are sneakers the biggest issue of our time right now? No. Despite this obvious fact of life, it doesn’t hurt to delve into the industry and see what’s really going on. Only time will tell what’s going to happen to brands like Nike and Adidas but for now, things are looking bleak and we can only hope that changes sooner rather than later.