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Did Nike Hurt Its Chances at the World Cup?

By Philip Saglimbeni - Apr 19, 2014 at 9:30AM

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With two disappointing product releases from Nike, the company's 2014 World Cup hopes are very much in question now.

In the United States, soccer is nowhere near as big as it is in many other parts of the world. However, with the World Cup happening every four years, soccer is given a chance to shine in front of millions of American viewers. As the major sporting event gets set to begin in Brazil on June 12, perhaps no company is better positioned to capitalize than footwear, apparel, and accessories manufacturer Nike ( NKE 1.62% ).

Unfortunately, when Nike released its uniforms for the U.S. men's soccer team, the results were not impressive. In fact, many fans reacted in disgust, and the situation is shaping up to be a major missed opportunity for Nike in 2014. Can the company's other major product releases designed for the World Cup save Nike's tournament hopes?

U.S. men's soccer away kit. Source: Nike.

Imposing uniforms?
Nike is responsible for designing the home and away tournament kits for the U.S. men's team. However, Nike seems to have disappointed on both fronts. When the company revealed the uniforms for the U.S. team's home games in March, there was a generally muted response; the predominantly white outfit looked eerily similar to England's uniform in the 2010 World Cup.

U.S. team captain Clint Dempsey stated, "It's always an honor to wear the colors of your country, and this summer we will be hard to miss in an all-white look." However, both Dempsey and Nike seem to have forgotten about America's other two colors, red and blue. Sure, there are hints of them in the collar and Nike emblem, but nothing about this year's jersey screams America. Fans looking to embrace soccer in the United States probably won't be too enthused that their team is wearing a uniform that doesn't stand out. 

Unfortunately, the uniform story doesn't improve, as Nike's away kit for the United States soccer team was greeted with an even worse response in April. Although the second uniform corrects the color problem, being very much red, white, and blue, it is also much more of an eyesore than the first. Fan response has been largely negative, with one Twitter user likening the jersey to an upside-down Bomb Pop frozen popsicle.

Martin Lotti, global creator for Nike Soccer, explained,

The USA has a profound and passionate pride in their nation. We wanted to create a design that reflects this in a daring and colorful fashion to give them an even more imposing appearance.

While Nike certainly succeeded in making the uniforms daring and colorful, the company probably also should have concentrated on making them attractive and appealing to consumers.

Nike's Magista soccer boot. Source: Nike. 

Magista
Fortunately for Nike, one soccer team's jerseys are but a small part of the company's global efforts for the 2014 World Cup. The largest opportunity that Nike has is with its new flagship soccer boot, Magista.

The company is hailing the boot as a game-changing product. With advancements like Nike Flyknit, which provides better ball control and touch, 360-degree rotational traction, and a sock-like fit, the boot is a revolutionary product; it was designed with help from some of the best attacking players in the world, including Barcelona's Andres Iniesta and Germany's Mario Gotze.

Pre-orders for the new cleat begin on April 29; this leaves a perfect amount of time for anticipation to build up to the beginning of World Cup tournament play on June 12.

Magista is extremely important to Nike in this World Cup; it allows the company to remind consumers and aggressive competitors like Under Armour ( UAA 3.17% ) that it is still the undisputed king of athletic footwear.

This may be increasingly important going forward, as Under Armour has been making strides in its footwear category lately. The company's new Speedform Apollo running shoe has been met with generally favorable reviews, including being named  "Best Debut" by Runner's World in the 2014 Spring Shoe Guide. 

Despite having a small impact on the segment's overall sales due to a limited release, the shoe does represent a step in the right direction for Under Armour; the company has long struggled to get its footwear division on track. If Under Armour can translate its innovative prowess from apparel to footwear, it could be a long-term threat to Nike in the athletic-footwear category.

Bottom line
Even with a couple of disappointing missteps in its World Cup product lineup, Nike still appears set to benefit the most from the forthcoming tournament in Brazil. With a focus on driving innovation in its large athletic-footwear segment, the company is smartly focusing on its most important product market. Accordingly, investors looking to benefit from the World Cup have no better alternative than Nike.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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