Michael Jordan’s stellar run as a shoe salesman mirrors his playing career. He’s tired of basketball, so he’s trying another sport: tennis.
Jordan was courtside at the U.S. Open this week as Roger Federer, his Nike teammate, started the tournament in a new pair of sneakers that looked a lot like the kicks His Airness sported in 1988. It was reportedly Jordan’s first U.S. Open, and Nike (NKE) promoted the event with a video of the two superstars awkwardly plinking around on a piano.
The crowd, as they say, went wild. The broadcasters were starstruck. And the shoes, part of a limited production run priced at $200 per pair, were gone in less time than it took Federer to dispatch an unranked opponent (6-3, 6-4, 7-6).
Today one can buy them on eBay (EBAY) for up to $568 (just punch in the really long model name: Zoom Vapor 9 Tour AJ3).
Strange as Air Jordans-for-tennis seem, the shoe marries two things that Nike does very well: selling Jordan and convincing sneakerheads they are getting something rare and exclusive—the footwear equivalent of a hot tech stock.
More than a decade after the man’s final retirement, the shoes still make up roughly half of the $4.5 billion basketball sneaker market. Jordans are also shoes for football players, women, and preschool girls. Nike, naturally, would like to bring some of that selling prowess to its tennis game.
At $4.5 billion, the basketball market dwarfs the demand for tennis gear, which Matt Powell, an sportswear analyst at Princeton Retail Analysis, pegs at around $100 million a year in the U.S. Tennis is something of a hedge. “The basketball business is really good right now, but it’s a fashion swing and we can swing away from it as quickly as we swung into it,” Powell says. And tennis, like running and golf, may have more potential when considering what consultants call the lifetime value of a customer. One doesn’t see a lot of silver-haired guys in Foot Locker’s basketball section.
The Jordan-Federer mashup was also a perfect execution of Nike’s microeconomics game. With a deft blend of wacky designs, flawless marketing, and a carefully cultivated sense of scarcity, the company has created a rich and lucrative market that it controls almost entirely.
Jordan’s tennis sneakers appreciated immediately. Nike didn’t say how many it made, only that supply was limited. The company could stock shelves with thousands more next week. “They have this stuff down to a science,” Powell said. “They always stay well short of demand.”
The Oregon sports giant has more one-time offerings in its much-hyped release schedule. On Saturday, it “drops” another retro pair of Air Jordans for $170. A week later, it will sell two more allegedly unique Jordans for $225 a pair. If you can’t get your hands on one, a funky green Durant model is coming a few days later at $150 and a motley pair of “Lebron” sneakers coming Sept. 13 ($250).
In terms of the long game in tennis, Nike may be positioning Federer for a Jordan-like role in retirement. Its stable of active players is already stocked with younger talent, including Rafael Nadal, Maria Sharapova, and Juan Martín Del Potro. Nike is also bidding for Andy Murray.
(Bloomberg Businessweek)
