Nike's Profits?? Vol. Retro vs New Kicks

23fan

23fan

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Sep 8, 2008
Sup NT,

Does NIKE make more money on Retro Shoes or on their New Kicks??

Let's say recently, i.e. from 2005 - Current.

I've been wondering this for a while, and I couldn't find any good info via google so I figured why not ask the most informed sneaker community in theworld?

Fry me up if you must, but school me on where Nike makes their shoe money. . . Retro Kicks vs New Kicks.

I was going to post in General Disc. but I think this has to do with "Specific Discussion about Nike footwear" so I posted here. Move topic ifnecessary.
 
Well I don't really know but they make money off bringing out retros. But you have to take into account the popularity of Kobe and Lebron's shoes andthe many other high profile athlete shoes that Nike puts out. Also what the general population buy vs. what us sneakerheads buy. We are just a small minorityof consumers who cop kicks. Just think about the regular shoes Nike puts out that people buy i.e. lower priced running shoes, acg's, basketball, etc. Basedon all that I would say the retro kicks don't make as much for Nike as the new styles do. But anyone please correct me if I am wrong.
 
Perhaps not so much research and development put into Retros, however in a sole collector a while back
they said that when Retroing a shoe they have to redesign all the molds.
 
I think retro's bring in more money simply because they don't have that much technology and they usually cost more due to the hype buildup.
 
Originally Posted by TheFoamCollector

Also what the general population buy vs. what us sneakerheads buy. We are just a small minority of consumers who cop kicks. Just think about the regular shoes Nike puts out that people buy
Click to expand...
The only point that really matters, what we buy is just a drop in the bucket.
 
Retro = Higher Profit Margin

Not ALL Retro's need new Design Molds.

Only One's they are cutting the fat out of.

Nike functions as several business units.

Basketball competes everyday against itself. Its called Nike Sportswear.. aka Nike Retro.

Tell me that aint a hell of a battle. Going against yourself in your prime?
 
whats cutting the fat?
nerd.gif
 
From what I remember in their annual report, Nike only breaks-down their revenues by product type (footwear, apparel & equipment), as well as by region ofcourse. If you really want to get a more detailed analysis of their revenues/sales, I guess you can try looking for 3rd-party reports from financial analysis.Sometimes they'll include detailed breakdowns of the Company's revenues as well as the profits for each division. But like Rock said, it will be brokendown by by each of their individual divisions (Nike Basketball, Nike Sportswear, Outdoor, etc) and not by "New kicks" or "Retro kicks"...
 
well strictly imo; new kicks need research, develment, and marketing whereas with retros the check has been cashed on all tree of these fields decades ago soim goin t have to say retros>new kicks in terms of profit margins.

(sp)
 
Originally Posted by blackngold1z

well strictly imo; new kicks need research, develment, and marketing whereas with retros the check has been cashed on all tree of these fields decades ago so im goin t have to say retros>new kicks in terms of profit margins.

(sp)
Click to expand...
with that formula however, you would have to factor in the volume of sales as well; hypothetically, Nike may make 50% profit on Nike Dunks butonly sell 15, 000 pairs where they may have a 35% profit margin on Air Max 2009s but sell 50,000 pairs, making the Air Max 2009s more profitable
 
i would think they make more off the retro's.

a retro that costs $150 vs a new model that costs $150. that retro probably retailed for a decent amount less the first time around, and the quality is usuallyworse. the new model is probably priced that high because of the technology and r&d.

JB is gonna charge $175 for the xi's later this year....give me a break.
 
Originally Posted by KrisC

who cares.
Click to expand...

Obviously people who type more than 4 words in their posts... unlike someone... *cough* *cough*

It would be interesting though to see the annual reports that SinnerP mentioned.
 
^ huh? shouldn't less tech and r&d mean higher cost?

figure how much ad money nike has poured into lebron and kobe this season, when they have a shoe like the purple foams they spent no marketing dollars on.
 
Originally Posted by sneakerfan93

Newer shoes require better technology..therefore Retros make less money
Click to expand...

???????

According to who? Then who says what tech is better, the marketing dept?
 
welll i mean were talking retros here, i argue that NT makes more from them because they are so rare these days and people are willing to bust of bills forthem. Also because they are promoted so well for example i check www.23.back.com like 3 times a week
 
Originally Posted by 23FAN

Does NIKE make more money on Retro Shoes or on their New Kicks??
Click to expand...
Interesting question, but honestly it's just not as simple as "one type is consistently more profitable than the other", so youwon't get a simple answer. (And I have to tread lightly here; as I've said in many of my posts, I like to share what knowledge I can, but I also lovemy job far too much to jeopardize it just so I can show off what I know on NT, so I'll err on the side of caution.)

In theory, yes, it seems that retros should be more profitable, because "they've been done before". But a retro product is not necessarily assimple as "hey, just go back and make this same thing we made 15 years ago", for several reasons off the top of my head:
- molds don't last forever... the molds that are used to create midsoles and outsoles are a major cost for any model, and these degrade over timeand with use. It's not like the original AF1 molds from 1982 are still in use today... they've probably been worn out and replaced twenty times over. And it's not like factories have unlimited time and space to store every old mold on the off chance Nike'll want to do a retro version a decadelater... often the original molds are long gone, meaning they need to be re-created, with all the cost and effort that implies. (The same is true of all the"cookie-cutter" type dies used to cut out all the material pattern pieces to make the uppers... these generally need to be re-made as well.)
- information degrades and disappears over time... the original patterns/molds/etc. were all done on systems that are now obsolete, four times over. Ifyou were even alive in the late 80s/early 90s, imagine trying to retrieve information from your piece-of-$#it PC and making it usable today. A lot of workback in the early days was actually done by faxing sketched-up drawings and things back and forth between Beaverton and Asia! So makingretros involves a lot of detective work, and sometimes even reverse-engineering old samples.
- sourcing... different countries, and even different factories within a given country, all cost different amounts to do business with, and aremore/less skilled in different construction techniques. Different, I say! [/old man]
- material choices... not all the same choices exist today; some vendors have gone out of business or (for various reasons) Nike no longer does businesswith them, many original materials are no longer available or have been obsoleted. A classy retro could use more expensive materials than a new release. Amuch bigger issue, that very few people understand, is the duty rates that the US government charges to import shoes... the laws are incredibly arcaneand complex, and seemingly minor pattern/material changes can have huge impacts to how profitable (or not) a given shoe can be. For example, leathersgenerally cost more than synthetics, but get better duty rates... it's enough to make your head spin.
- royalties... I freely admit I don't know much about this, but I suspect that, for example, Anfernee Hardaway makes something (I have noidea what) off of any "Penny" signature shoe, an expense that Nike wouldn't have to pay for a new, non-signature model. Just something else tokeep in mind.

I feel like I'm forgetting something else, but I've gotta crash soon and will cut it off here for now...
 
Im happy to part with my cash as long as nike keeps turining out good shoes. Retro or original if i like it i will buy
 
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