Nike has called Serena Williams one of the greatest athletes of all time. Now the sports apparel giant is seeking to cash in on the tennis champions fame by honoring her with its new Greatness Collection. The line launched just in time for the 2015 U.S. Open tournament features on- and off-court apparel and a trio of tennis shoes inspired by Williams and created in collaboration with Nike president and CEO Mark Parker.
If Williams wins the two-week U.S. Open, which ends on September 13 with the mens final, the worlds highest-ranked female singles player will have 22 championship trophies, tying Steffi Graf for the most Grand Slam titles in the Open era. She will also be the first woman to capture a Grand Slam in the same calendar year since Graf pulled off that feat in 1988.
For Nike, aligning itself with a talent like Williams is big business. More than ever, sports brands are capitalizing on the power and popularity of professional female athletes to drive revenue growth. For brands, it is about return on investment, says Richard Powers, a senior lecturer focusing on sports marketing at the University of Torontos Rotman School of Management. If a female athlete can give them an ROI, they will look at her.
Williams and Nike named for the Greek goddess of victory go way back. The Beaverton, Oregonbased company began sponsoring her in 2004, when she had already won six Grand Slam tournaments. Today Williams has 36 major singles, doubles and mixed-doubles titles more than any other active player, male or female and four Olympic gold medals under her belt. At Wimbledon in July, the Compton, California, native, who turned pro two decades ago, secured her second Serena Slam, winning four championships in a row at the relatively advanced age of 33. (As of early September the average age of the top ten female tennis players was 26.)
Nike sponsors seven of the top 20 players ranked by the Womens Tennis Association including the two highest-paid female athletes and three current and former world tennis No. 1s versus only three of the Association of Tennis Professionals top 20 men. The sportswear maker also sponsored the 2015 U.S. national womens soccer team at the FIFA Womens World Cup, which took place in Vancouver in July. Some 20 million American viewers tuned in to watch their country pummel Japan, 52, in the final, making it the most-watched soccer event in U.S. television history and attracting a bigger audience than the National Basketball Associations and National Hockey Leagues final playoff games this year. Nike was the most-tweeted brand leading up to and during the World Cup final, according to Foster City, Californiabased Amobee Brand Intelligence.
Nike isnt just targeting professional female athletes: Last fall it introduced a womens sportswear line. By 2017 it plans to add $2 billion to this segments annual sales, which stood at roughly $6 billion last year. In its recent report for the 2015 fiscal year, Nike noted that its womens business had seen 20 percent year-over-year revenue growth, versus 9 percent for the mens side, making it by far the companys fastest-expanding apparel division.
The great brands are going to try to keep that momentum going and work with it and develop it and try to do a better job of servicing women, says Robert Ohmes, managing director of equity research for apparel, footwear and textiles at Bank of America Merrill Lynch.
Leading sportswear brands are amping up their womens apparel businesses with better design, creation, marketing, merchandising and presentation of their products, Ohmes explains. Featuring professional female athletes helps customers better engage with the brand, which is important for growth, he says.
Nike is a leader when it comes to understanding the power of the womens market, but Rotmans Powers suggests that investors should keep an eye on Puma and Under Armour. The latter, which last year overtook Adidas as the No. 2 sportswear brand in the U.S., sponsors American athletes Lindsey Vonn, the most decorated female skier of all time; Olympic gold medalist and world champion soccer player Kelley OHara; and tennis star Sloane Stephens, who shot to fame when she upset Williams in the quarterfinals of the 2013 Australian Open.
In the summer of 2014, Under Armour launched a $15 million campaign introducing a new athletic clothing line aimed at women. The Baltimore-based company intends to grow its womens unit which Nikes currently outpaces tenfold from $600 million to $1 billion in annual revenue by next year.
The product lineup coming out of brands like Nike and Under Armour have supported a greater interest, particularly from women, in dressing in athletic and athletic-inspired clothing over nonathletic, says BofA Merrill Lynchs Ohmes.
Athleisure, or performance gear such as yoga pants and sneakers worn for leisure instead of exercise, has been the dominant trend for the past couple of years; athletic footwear and apparel outsell nonathletic products in mens and womens categories, the New Yorkbased analyst adds. Investors are piling in as they recognize the growth opportunity, Ohmes says. Nike stock has gained almost 39 percent since last September; Under Armours share price has risen about 33 percent over the same time period.
Women in professional sports can rake in much more from endorsement deals than they ever command on the tournament circuit. Seven of the worlds ten highest-paid female athletes this year are tennis players, according to Forbes magazine. Thats partly because in a rarity for pro sports, female tennis players earn nearly the same purses as men at championship tournaments. But for five of those top-earning women, endorsements make up more than half of their annual earnings.
U.S. Open contender Williamss $73.2 million in career prize money doubles second-place Maria Sharapovas take. Yet for the 12 months ended this June, Sharapova retained the title of highest-paid female athlete for an 11th consecutive year, thanks to lucrative sponsorships with Nike and names such as luxury carmaker Porsche and high-end watch brand TAG Heuer; those deals contributed $23 million of the $29.7 million she pocketed. During the same period, Williams earned a combined $13 million from endorsements for companies including Nike, Gatorade Co. and Wilson Sporting Goods Co.
After withdrawing from this years U.S. Open with a leg injury, 2006 champ Sharapova wont stand in the way of Williamss bid to win the event four years in a row. Tickets for the womens singles final sold out before the mens match for the first time, according to the United States Tennis Association. Nike must be hoping that Williams can notch another victory.