On a muggy, 87-degree morning in Midtown Manhattan, dozens of journalists and sneakerheads were packed into a dark, 30-degree warehouse squatting and sprinting and hurling medicine balls while trainers barked orders and a video projected athletes running through thigh-deep snow.
This little scene—a Hunger Games-styled publicity pitch—is what happens when Nike wants to show off new gear. On Tuesday, it was winter clothes: specifically, a men's hoodie and a vest and running shirt for women. The Oregon-based apparel giant, ever-keen on innovation, is hoping that the fabric and techniques in these clothes can change the sportswear game as much as its Flyknit shoe-weaving technology shifted the footwear market.
Leading the selection is Nike's "Therma-Sphere Max," which, according to the tag, is mostly a blend of polyester and spandex. The magic, apparently, is in the construction: The beehive pattern of "raised nodes" and a “spacer thermal design" is intended to trap air the way a wetsuit captures a layer of water to be warmed by the underlying skin. The jacket version comes with an adjustable "scuba hood."
And then there is the "AeroReact," a fabric that loosens just before its wearer sweats. Nike didn't want to mention what exactly the material is made of, but again, much of the magic is allegedly in the construction—how the whole thing is woven together.
Nike's broader message is that layering—the mantra of every ski instructor and mountaineer since Edmund Hilary wrestled Everest—is silly. With the right clothes, a snowbound runner needs just two layers, spokesman Charlie Brooks explains. Scratch that. Not "clothes." Nike's new gear is "wearable technology." And it is priced accordingly. The hoodie alone costs $185.
Many of the 54 million runners in the U.S. may wonder how well this stuff works and if it's worth that kind of money. Nike investors will be curious, too. And they'll have an additional question: Why didn't this stuff come sooner?
For all its mass and marketing clout, Nike's business model is still predominantly built on shoes. Even though the company has blitzed the athleisure market, only 28 percent of its revenue last year came from apparel.
Meanwhile, it is still, predominantly, a Northern Hemisphere player. Last year, 63 percent of Nike's sales dollars flowed from North America and Western Europe. What does that mean? In short: Winter is important. And that’s winter in the snowy, storybook sense, not the New Year’s Polar Bear Plunge in balmy Sullivans Island, S.C.
Under Armour, in comparison, gets four out of five revenue dollars from apparel and has long targeted snowy sportsmen—be they Minnesota Vikings or camo-clad bow-hunters.
If Nike wants to keep its substantial lead over its scrappy Baltimore rival, it will need more cozy clothes and sweat-sensing shirts. Every year, Nike's business from December through February—a quarter that should enjoy a heady holiday boost—is the company's most anemic. In the past five years, on average, revenue in that period has been 15 percent below Nike’s tally from June through August, its best.
Not surprisingly, Nike has been working hard on winterwear. Peter Harrison, an Innovation Project director at Nike, says the breathable running shirt it unveiled on Tuesday took three years to develop, roughly twice as long as most of the company's big research and development initiatives. "We see this as a huge opportunity and we'll be rolling it out to other categories in the future," Harrison says. Nike launched its Therma-Sphere garments a little over a year ago, coinciding with an ad montage of snowy workouts under the tagline, "Choose Your Winter."
The company now even makes a couple of pairs of snowboarding boots. And this week it is pushing a new line of camouflage fleece. (The blue version may not offer much help to hunters.)
If a team of consultants were to detail Nike's core competencies, winterwear probably wouldn't be near the top of their list. Outdoor gear makers such as Patagonia, Canada Goose, and VF's North Face have much more experience in the segment, as well as the brand heritage that marketing teams and fashion bloggers consider critical.
Still, the market for technical, cold-fighting clothes may be the closest thing sportswear companies have to a white space at the moment. After all, even the market for yoga tights and LeBron hightops has a limit.