Sports brands, such as Nike, have struggled to sustain their profits as their brands’ core business, apparel sales, have been squeezed.
In recent years, some brands have been struggling with high sales volumes, which means they have less cash to invest in other brands.
A recent report from Ernst & Young, a consulting firm, found that many of the top sports apparel brands are facing a $3 billion shortfall over the next five years.
As a result, some sports brands have lost their edge and are losing market share.
For example, the U.S. women’s soccer team, the USWNT, was forced to withdraw from the Olympics earlier this year, due to the lack of support from sponsors.
Another recent report by The Sports Business Journal found that Nike’s sports brands are losing money on average, with revenue declining from $1.1 billion in 2017 to $936 million in 2020.
The report also found that Adidas is losing $1 billion annually on its core sports brands.
Adidas, the world’s largest sports brand, has struggled to keep up with competitors’ new trends, as well as with changing consumer preferences.