For the past year or so, the powers that be at Nike and Skims—the world’s largest sports conglomerate and the world’s most talked-about intimates company—have been secretly working on a product collaboration. Only a few employees were brought in from each side, and they created a code name, which most other employees still don’t know. Up in Beaverton, information has started leaking that the project will hit stores in the coming weeks.
Is it a one-off collection, like most Skims collaborations, or something deeper? Nike tends to partner with smaller designers and brands on a longer-term, multiseason basis—Sacai, Bode, Tom Sachs—but works with bigger brands (Tiffany, Supreme, Dior) on one-offs. All will be revealed in the coming days, but for now, both companies remain in stealth mode. (Reps for Nike and Skims declined to comment.)
No matter how it shakes out, this is a big move, and a harbinger of both businesses’ futures at a critical time for them. These days, collaborations are a pantry essential for multinational brands. Once a marketing stunt, they are now a consumer expectation, and are judged harshly on execution. A successful collaboration can generate meaningful sales while serving as an awareness machine and customer acquisition tool. Nike—the market leader, whose dominance has been threatened by a mix of poor business decisions, mediocre product, and formidable challengers—has experienced this firsthand. While the Tiffany x Nike collaboration swiftly sold out, negative feedback around its authenticity undermined its success.
A partnership with Skims, though, could address a lot of headaches for Nike—especially if the product is good. After all, Nike has a woman problem. Sure, 40 percent of its customers are women and the brand generated $8.5 billion from female apparel and shoes last year. (They’re not, uh, failing, in any sense.) But women should arguably be their largest customer base. That’s the goal of any clothing business, even sports apparel, since women do most of the household shopping. (Even small menswear brands that launch women’s usually see the ratio flip after just a couple of seasons.) We could say that’s changing, and that gender is a construct, etcetera, but the reality is that Nike’s gender gap has allowed Lululemon, Alo, et al. to flourish.
At the Jordan sub-brand—whose revenues, unlike Converse, are attributed to the Nike brand on financial filings—it’s an even bigger issue, one that the company has been trying to fix for years. With the arrival of beloved Nike veteran Elliott Hill as C.E.O. in October 2024, you can already see advancements, such as last week’s Super Bowl ad featuring all female athletes.
A long-term partnership with Skims, which convincingly shills female empowerment, could help with Nike’s efforts to change the equation. And winning in activewear—where Victoria’s Secret has failed, multiple times—could give Skims yet another edge on the already shriveling competition.
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The background noise here, of course, is slightly more nuanced. Not only does Skims solve an Alo-, Lululemon-, and maybe even Vuori-sized hole for Nike, but the historic sports brand might reciprocate the favor. Skims raised $270 million a year and a half ago at a $4 billion valuation, with sales projected at $750 million per year. At this point, assuming their investor base doesn’t want to be layered in the capital stack, the company can either I.P.O. or sell to a strategic.
Indeed, one person close to Skims suggested that this collab was a precursor to a possible acquisition, while another pooh-poohed that outcome. My guess is that it has obviously crossed the minds of both parties. Skims would offer Nike more optionality in the women’s apparel market, particularly the lifestyle category. And like the Jordan sub-brand, its key person is arguably the most famous in the world.
New brand integration is never simple—absorbing Converse wasn’t easy for Nike, absorbing Tiffany hasn’t been easy for LVMH—but Nike has the real estate, the infrastructure, and the supply chain to scale Skims to a $5 billion business, one that’s partially shielded from investor sentiment. The focus for Nike’s investors will always be Nike.
Of course, without getting ahead of ourselves, they’d have to figure out a price. From what I’ve heard, Skims has been growing steadily since its 2023 Series C. In 2024, the company generated nearly $880 million in direct-to-consumer sales alone, up from $725 million a year earlier, according to market research firm YipitData. (The company does not release figures itself, so consider these numbers directionally correct.) Nike, with a market cap of $108 billion and a fair amount of liquidity—not to mention the ability to borrow—could absorb it. In my mind, this is an ideal exit scenario for Skims, and especially Kim Kardashian, who owns a 5 percent royalty on sales while the company remains private.
While Nike would never enter the same sort of arrangement they brokered 41 years ago with Michael Jordan—who still earns 5 percent of royalties on annual sales, amounting to annual nine-figure payments—there is at least a working model in place. As for Jens and Emma Grede, Kim’s partners in the venture, the question is whether they see Skims as the centerpiece of their own empire—the Victoria’s Secret to Les Wexner’s Limited Brands. If so, they may want to go through the pains of building and scaling Skims themselves, even if it exposes them to the whims of the public markets. But that’s a question almost always solved by money. Either way, a lot of rich people are about to get much richer.