The athletic apparel market is one of the largest and most profitable in the world, but that isn't news to anyone over the age of, say, 10 years old. What else is not news is the fact that Nike NKE and Adidas ADDYY are two of the world's biggest players in the athletic apparel game and have been for the better part of the last forty years. So for the savvy Wall Street investor, which is the better bet for a long-term investment?
Let's start with market value. Nike is currently the world leader in athletic apparel and footwear manufacturing and enjoys a market value of close to $50 billion. Adidas on the other hand, sits in the number two position worldwide in the same sector and has a market value of about $12 billion.
But that was over a year ago and while both companies are still performing well, Adidas has begun to lose ground in the sports apparel race. Since the Olympic and UEFA festivities died down at the end of summer 2012 and all of the hype surrounding them faded, demand in Europe, Adidas's number one market, has dwindled significantly.
What makes a huge difference in Nike's formidable lead in the sector is its presence in the National Football League. While soccer – or futbol, as our friends across the pond and everywhere else in the world call it – dominates the sporting world in much of Europe, American football is the king of sports in the United States by an almost unfairly gigantic margin.
While most professional futbol players in Europe wear Adidas, Nike is the exclusive supplier of NFL jerseys here in the States. But the NFL is just the beginning for Nike in terms of the reasons for them being the preferred stock over Adidas. Its subsidiaries are huge and include the likes of Hurley International and Converse. And with products like Nike Pro, Nike Golf, Nike+, and the global juggernaut Air Jordan Jumpman brand under its belt (to say nothing of the aforementioned lead in market share value) Nike seems to be the stock to beat, not only now but for the foreseeable future.
So, who would you rather? Nike or Adidas? Inquiring minds want to know.
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