Nike's New NFL Uniforms To Generate Buzz For Apparel

Date : 04/03/2012 @ 12:14PM
Source : Dow Jones News
Stock : Nike, Inc. (NKE)
Quote : 59.58  -0.37 (-0.62%) @ 10:18AM

Nike's New NFL Uniforms To Generate Buzz For Apparel

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Nike Inc. (NKE) on Tuesday unveiled new National Football League uniforms developed under a five-year license deal, a line that will become available to consumers at the end of April and help bolster the athletic-goods maker's apparel offerings.

While Nike has had past deals with individual teams, this is the first time the company will become the exclusive supplier of NFL gear to all of the league's 32 teams. Changes to the latest slate of uniforms, which will be used beginning in the 2012 season, varies by team as Nike said some incorporated all of the company's suggestions while others selected minor updates.

Selling jerseys this spring and summer is critical to the early success of Nike's deal with the NFL and its players, in which it paid a reported $1.1 billion for the right to be the league's official provider for the next five years. Adidas AG's (ADS.XE, ADDYY) Reebok unit held the contract for the last decade.

Terms of the Nike-NFL deal haven't been disclosed, though Adidas has said the loss of the license agreement will result in an estimated $200 million to $250 million a year in lost revenue for Reebok. Adidas said the end of Reebok's NFL license will contribute to the unit's sales decline this year.

For Nike, the deal will help bolster the company's apparel business, which has notched a strong performance in line with the company's footwear and equipment businesses. For the first nine months of the fiscal-year period ended Feb. 29, Nike's apparel sales have jumped 16% to $4.74 billion.

Nike, which initially signed the pact with the NFL in October 2010, created the uniform elements under the licensing agreement--including the jersey, the belts, pants, socks and gloves. Nike is unveiling the gear at an event in New York City on Tuesday.

Nike often inks apparel licensing or marketing and advertising deals with professional teams, individual athletes and college squads. The company will begin to allow consumers to buy the newest jerseys at the end of this month online and at various retail chains, including Nike's stores.

The transition between Reebok and Nike hasn't been entirely smooth. Nike last week sued the Adidas unit for allegedly selling unauthorized New York Jets T-shirts and other apparel featuring new team quarterback Tim Tebow's name. A federal judge ordered Reebok to temporarily stop manufacturing the Jets apparel featuring the name and number of Tebow and also barred Reebok from accepting additional orders for Tebow-related Jets items.

Analysts have been overwhelmingly sanguine about Nike due to excitement about growth opportunities in China and a strong presence in high-end athletic footwear. Nike has already unveiled several new products this year, including the Nike+ FuelBand and a slate of footwear and apparel gear ahead of the Summer Olympics and the European Football Championships, events that are also expected to boost excitement about Nike's latest products.

--By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com

--Miguel Bustillo and Chad Bray of The Wall Street Journal contributed to this article

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