Nike action sports is coasting along small with aims of going big

Nike action sports is coasting along small with aims of going big

In the world of Nike, there is no business category smaller than action sports.

Granted, there are plenty of sporting-goods companies that would be satisfied with $495 million a year in wholesale revenue — the total recorded by action sports in the fiscal year that ended May 31, essentially unchanged from the previous year. Action sports accounted for only 2 percent of the $20.8 billion Nike Brand revenue pie. By comparison, Nike basketball accounted for $2.6 billion. (Total Nike revenue, taking everything into account, was $25.3 billion.)

Action sports advocates have a quick response to that kind of comparison: Just you wait. And they might be right. There’s a reason why the world’s biggest sports footwear and apparel company has made a bet on action sports through the Nike brand and its surfwear and skatewear subsidiary, Hurley International.

Surfing, skateboarding and snowboarding arguably have had only a single generation of development in the youthful market sports companies crave. By contrast, Nike’s bread-and-butter traditional sports of running, basketball, soccer and football have churned through multiple generations of athletes — and created a lot of potential consumers in the process.

“Participation is growing,” said Mitch Kummetz, senior stock analyst covering the active and outdoor sector for R.W. Baird Co. “This is an aspirational lifestyle that appeals to a lot of consumers.”

This week, Nike made its latest push into action sports, rolling out a collection of footwear and apparel with a 2-year-old Portland startup, Poler.

Poler and its founders, Benji Wagner and Kharma Vella, have quickly established a reputation for provocative, interesting gear in the outdoor-equipment industry, a space not traditionally known for dramatic change. The company has interpreted sleeping bags and daypacks a lot differently than the mainstream, for example.

In addition to Nike, the company has already collaborated with Girl Skateboards of Torrance, Calif., Stance Socks of San Clemente, Calif., and Smith Optics of Ketchum, Idaho.

Nike SB (skateboard) representatives and Poler’s Wagner and Vella had been talking for about a year before this week’s product release, Wagner said. While only eight products — four each on the footwear and apparel side — were introduced Wednesday, more are scheduled for rollout later this year. Among the upcoming products is a Poler-designed snowboarding boot.

Wagner knows action sports makes up a relatively small amount of Nike revenue. But he takes the long view.

“There are a lot of kids out there surfing, skating and snowboarding who aren’t interested in team sports at all,” Wagner said. “It’s millions and millions. It’s a huge category that every company is interested in.

“There’s no reason they wouldn’t be interested.”

Nike’s initial forays into skateboarding and surfing are, apparently, long forgotten. Core participants viewed that initial splash with suspicion. It’s been a least a decade since Nike produced videos portraying skateboarding as an outsider might view it: Rebel Without a Cause on a Board. Now, the company’s videos portray the sport with a three-word unwritten mantra: skateboarding is fun.

“They’ve made lots of attempts to penetrate this space and they’ve had a lot of failures,” Kummetz, the analyst, said.

But persistence, or perhaps the resources to survive a protracted industry shakeout, has paid off. Where there may have been 10 skate footwear brands a decade ago, now there are essentially two: Nike and Vans.

In addition, Nike is selling its own line of snow wear as well as snowboarding boots and, along with Hurley, surfing apparel.

Wagner said his company is looking forward to a long, collaborative relationship with Nike. He discounts, however, any larger significance of the partnership.

“Everybody in Portland,” he said, “has some kind of relationship with Nike.”

— Allan Brettman