The Migos-Nike-Finish Line Love Triangle

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Dan Runcie

The Migos (via Shutterstock)

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Finish Line offers the Migos brand flexibility, but the rappers were better of partnering directly with Nike.

This is the last part of a three-part series on the footwear industry in hip-hop.
Part one: Timberland Showed Up Late to the Cookout
Part two: Kendrick Lamar Can’t Save the Nike Cortez

The hottest hip-hop group on the planet and the most lukewarm sneaker retailer in America have joined forces. Deals like this are unique in today’s direct-to-consumer sneaker market. Paul Diehl, Finish Line’s senior director of content, spoke on the project in the initial press release in August 2017:

This collaboration is unlike anything we’ve ever done before. Instead of focusing on one particular brand or product, we’ve opened the door for Migos to take creative control and invest in Finish Line holistically.

To date, the Migos have released a few Nike and Under Armour sneaker styles through Finish Line: The Nike Air Max 270, Air Huarache, Air VaporMax, Epic React and the Under Armour HOVR. There are a number of other brands to choose from too:

Featured brands on Finish Line website (via Finish Line)

It’s a good move for Finish Line. The company was just bought by British retailer JD Sports for $558 million. Finish Line’s performance, along with the entire U.S. athletic footwear retail sector, has underperformed in recent years, but this merger could help both companies expand their footprint. A partnership with the Migos, if well executed, might give Finish Line a breath of fresh air. This differentiation gives Finish Line a product that its biggest rival, Foot Locker, doesn’t have.

Does this partnership make sense for the Migos though? The “Bad and Boujee” rappers drive today’s culture in hip-hop. They’re extremely marketable. Any brand targeting hip-hop fans and black millennials would love to partner with them. Brand flexibility is convenient, but were the Migos better off partnering directly with one shoe brand?

Finish Line’s growth

The Indianapolis-based retailer has over 900 locations in U.S. shopping malls and Macy’s department stores. But since hundreds of malls, Macy’s, and Finish Lines have closed their doors in recent years, the strength of this partnership is in online distribution.

Finish Line invested in their online presence by relaunching its app and website in early 2017, and it seems to be paying off. Online sales grew 58% from 2016 to 2017, and now account for 22% of the company’s revenue, compared to only 14.2% in 2016. Mobile accounts for more than two-thirds of all online sales. Migos’ millennial fan base shops online more often than any other age demographic, so these trends are heading in the right direction.

Given the frustration that many sneakerheads face when buying high demand sneakers, a strong online presence is key. Finish Line has the sneakers front and center on the Migos-Finish Line webpage.

Based on current availability, these sneakers are not limited releases. But depending on what Quavo, Offset, and Takeoff have planned, Finish Line has the infrastructure ready to sell additional styles and models in the future.

Diversifying their sneaker portfolio?

The Migos—who had patiently waited until Donatella Versace acknowledged their 2013 hit song with Drake, “Versace”—have come a long way in the partnerships game. In the past year, the rappers locked deals with the American Cancer Society, Reservoir Media, an Apple commercial, and their own clothing line—Yung Rich Nation. It’s quite the come up. On Easter Sunday, they will host a celebrity football game (sponsored by several companies, including Finish Line and Under Armour) at Quavo’s high school. These boys can do no wrong right now, and a sneaker deal is the only thing they’re missing.

A direct deal with Nike or Under Armour seemed natural, but both companies have seen sales dip in recent years. Adidas has gained considerable market share from them (which Kanye West is very boastful about). Given the shifting tides, it’s unpredictable to know which companies will prevail in 2019 or 2020. One benefit of the Finish Line deal is that Migos can hedge its bets across the big sneaker manufacturers continue their soft relationship with Under Armour—who’s been wanting to work with the rappers for some time.

While Under Armour and other Finish Line brands provide alternative options for Migos, Nike still accounts for over 70% of the merchandise sold in Finish Line stores. If Nike experiences any downturn, Finish Line will face it too. Additionally, Finish Line is a U.S.-based retailer. That may change with its acquisition, but it currently limits the retailer to the underperforming U.S. footwear market. Several industry analysts believe that has Nike fared better than Under Armour in recent years because only 50% of Nike’s revenue came from the U.S., compared to 80% of Under Armour’s. Finish Line is more reliant on Nike’s U.S. market than Nike itself is.

Nike also has more power in its relationship with Finish Line. In 2015, Nike sold 20% of its merchandise through Foot Locker, its biggest vendor. Numbers weren’t released for Finish Line, but similarly, Nike accounts for almost 70% of Foot Locker’s merchandise sold. Since Foot Locker’s annual revenue is about 5 times that of Finish Line’s, we can assume that roughly 4% of Nike’s merchandise is sold at Finish Line.

That power dynamic will only get stronger. Nike’s direct-to-consumer business is now at 28%, which accounted for 70% of the company’s growth last year. As international and direct-to-consumer markets continue to grow at a faster rate than Nike’s U.S. wholesale revenue, that shift may put pressure Finish Line over time—which could work against the Migos with this current partnership.

Just Do It For The Culture

Despite the brand flexibility and uniqueness that Finish Line offers, the Migos haven’t shown that they truly value that flexibility. When they get to the register at the sneaker store, they don’t buy multiple brands—they buy Nike.

On an episode of Complex’s Sneaker Shopping in 2017, Quavo, Offset, and Takeoff visited Flight Club, which has more sneakers than Anthony Anderson’s character in black-ish. The Migos briefly acknowledged adidas’ Yeezys and Pharell sneakers, but they spent over $2,700 and only bought retro Nike Air Jordans. That’s it. Under Armour wasn’t even mentioned. The only non-Jordans the group expressed interested in were the Back to the Future Marty McFly Nikes (which Offset also considered buying in January 2018).

Finish Line is making the most of this opportunity with the Migos, as they should. This past Monday was #AirMaxDay and the retailer went all the way in. They released another promo ad with the rappers and Caleb McLaughlin. Their #ShoeSoFresh campaign has made some traction. Hopefully for Finish Line, they can can continue this partnership after the acquisition and find opportunities to leverage JD Sports to expand globally.

But unless the Migos’ Under Armour HOVRs can help the Baltimore-based athletic apparel company relive its 2015 glory, the boys from Nawf Atlanta were better off joining Team Nike directly. They love Jordans and there’s no shame in that. Sure, they could release their own Jordan Brand sneakers through Finish Line, but it’s not the same. Nike has a broader reach and can match the cultural influence the Migos have. Nike can more easily create a line of limited release Migos-Jordans (which would appease Quavo, who expressed his appreciation for limited releases). The sneaker company can also create mass-produced similarly-modeled sneaker that resemble the exclusive Migos sneakers (which is the true key to success in celebrity-sneaker deals).

Plus, Nike has a $3 billion annual marketing budget. More of that money will serve direct-to-consumer and international markets over time. The Migos are already worldwide—heading to Europe this summer to continue touring their most recent album, Culture II. We don’t want to wait for Culture III to find out what could have been for Nike and Migos.

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Dan Runcie

Dan Runcie

Founder of Trapital

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