Everybody wants the Yeezys. It’s a frigid February night during New York Fashion Week, and Kanye West has just spent the afternoon at a runway event in SoHo unveiling his first fashion collection for Adidas—a collection anchored by the futuristic Yeezy Boost 750s, a.k.a. the Yeezys, a.k.a. suede high-top sneakers that look straight out of the Star Wars props department, complete with side zips and patented springy soles made from spaceship-grade foam. And now here comes Kanye, clambering onto a purpose-built stage at the intersection of Broadway and Fifth Avenue, in the shadow of the Flatiron Building, at an event that’s been billed as a concert but feels closer to a product launch. Ten thousand people have shown up tonight, many claiming their tickets with an Adidas app and the rest waiting untold hours in temperatures that barely top 15 degrees, the cold compounded by gut-punches of snowy wind barreling off the East River.
“We ain’t even gonna mention that other company no more, right?” Kanye asks the crowd. “We ain’t wearing that other company no more, right?”
That other company, of course, is Nike—not only the most popular sneaker manufacturer but the single most valuable apparel brand in the world. Nike has 57,000 employees and a market cap north of $86 billion. And in these halcyon days of sneaker culture—the once humble sneaker having become the focal point of personal style—Nike has a heritage that consumers respect and that its competitors can’t buy.
In fact, until relatively recently, if you happened to be a big-name rapper or marquee athlete, you didn’t really think twice about signing with Nike. Where else would you go? Kanye himself parked his Air Yeezy line at Nike for four years.
Then, in 2013, in a deal worth a reported $10 million, Kanye abruptly announced he was leaving Nike and going to Adidas, the German rival that keeps its North American headquarters in Portland, Oregon, just up the road from Nike HQ in suburban Beaverton. Nike was shackling his creative freedom, he said. Not paying him enough. Not respecting him as a designer. “They weren’t giving me the opportunity to grow,” he alleged. “They were working off an old business model.”
He wasn’t alone in his disenchantment. Professional shoe designers—the kind who do it full-time and don’t have side gigs as platinum recording artists—were saying similar things about Nike. “Stifling,” they called it. One former designer described a paranoid corporate culture of profound “distrust and intimidation.”
Kanye spent the next year and a half developing the Yeezy Boosts with designers at Adidas.
“Sing it loud for Adidas for supporting me,” he tells the New York crowd, his silhouette magnified on the screen behind him. “[They] let me get my dreams out, let me make shit for y’all when everybody was suffocating me.”
Within minutes of their release, the initial 9,000-pair run of $350 Yeezys has vanished from stores around the country, and the average price on resale sites is $1,500, with some profiteers asking as much as five grand. It feels like the first time in years (maybe even since the original Reebok Pumps in 1989) that any sneaker company has drawn blood against Nike.
And it’s enough to make you ask yourself, if you happen to be the kind of person who cares deeply about sneakers, as more and more of us do, whether the tide in this lopsided fight might finally be turning.
The experts who estimate the size of the global sneaker business put the number around $55 billion, greater than the entire GDP of Ethiopia. No one buys more sneakers than Americans, and we’re buying more than ever. According to the premier analytics firm NPD Group, American consumers spent $28 billion on sneakers last year alone, an almost 50 percent bump from just five years previous. Matt Powell, a self-described “sneakerologist” with NPD, believes the growth will continue for the foreseeable future. We are entering, he says, a “permanent state of sneaker-ness.”
Subscribers to this magazine (or anyone who spends any reasonable time out of doors) will understand how Powell can be so confident. A decade back, sneakers were, for the majority of adults, casual footwear, designated for specific occasions: the gym, an athletic event, mowing the lawn. Today we wear sneakers everywhere—to work, to dinner, to church, to weddings—and spend as much on them as we do on dress shoes.
Controlling 62 percent of the market (compared with Adidas’s 5 percent), Nike is the primary beneficiary of our addiction, and the reasons for its supremacy are myriad. It is big. It is smart. Its endorsement roster is a portfolio of human blue-chip stocks. It caters to traditionalists with old-school Blazers, Jordans, and Dunks—some of the coolest and most coveted sneakers ever made—while testing the bounds of how futuristic a shoe can look and feel. (See, most recently, the Flyknit.) It employs more designers than any other shoe manufacturer (650 compared with Adidas’s 200) and gives them unparalleled resources. Nike will take expensive risks, and when it whiffs, as it recently did with an ill-fated and quickly canceled snowboarding line, it acknowledges the error and moves on.
For years, Adidas appeared destined to fall further behind Nike in the States. Yes, Adidas had its deep roots in soccer culture (it still outfits clubs including Manchester United, A.C. Milan, and Real Madrid), and yes, it remained a top sneaker retailer in Western Europe. But although it kept offices in Portland, most of its design staff and senior brass were stuck in Adidas’s global headquarters, in the German factory town of Herzogenaurach. Unsurprisingly, Adidas products often appeared out of touch with the average U.S. customer and tone-deaf about the American holy trinity of football, baseball, and basketball.
That began to change last year, with the installation of a new Adidas Group North America president, Mark King, who has mounted an unprecedented challenge to Nike—of which the Kanye shoe is only a small part. Under King, Adidas has poured money into advertising and gobbled up new endorsees. His biggest coup came this summer, when he outbid Nike to snatch away the NBA’s bearded wonder, James Harden, in a deal reportedly worth $200 million over 13 years. In fact, Adidas is in the midst of the most aggressive marketing campaign in company history, showcasing music-industry talent like Pharrell, who has designed his own polka-dot Adidas sneakers and lime green track jackets. Last year, Adidas also sold out of its $800-a-pair sneaker collaboration with goth designer Rick Owens, the dark lord of haute menswear, who stitched his freaky sneaks with goat leather. The low-top Yeezy Boost 350, with a Primeknit mesh upper and rope laces, dropped in June, selling out within an hour.
Adidas has unveiled a key innovation in its Boost line, which utilizes that springy, patented foam in the sole. It has also positioned classic Adidas Originals sneakers like the Stan Smith and the Superstar—recently relaunched for its forty-fifth anniversary—less as athletic footwear and more as straight fashion. And it has moved Adidas creative director Paul Gaudio from Herzogenaurach to Portland, along with a small army of top designers who have been tasked with ripping the American market away from Nike.
Young tastemakers are taking note. In August, Adidas announced the signing of the dapper, baby-Afro-wearing NBA rookie Justise Winslow, a national champion this year with Duke, whose statement about Adidas after signing was telling: “What they’ve been doing with Kanye and Originals is changing the game.”
Adidas may never be able to approach the reported $3 billion Nike spends every year on marketing, but it’s trying everything it can to out-cool Nike—to win the battle of taste first, ultimately building enough street cred to win the long-term financial contest.
A buyer for one of the most beloved streetwear stores in the country, who asked to remain anonymous because he works closely with both Adidas and Nike, told me that the Yeezy launch was “insane—you just shut off your fucking phone, because all these people are calling you, begging you for a pair. So look, is Nike catchable in the short term? Probably not. But if you’re able to create this kind of hype that the Yeezy did, and to sustain it, then you’re getting somewhere. Then you’re looking at a real war.”
This summer, 77-year-old Nike chairman Phil Knight, the Steve Jobs of the swoosh, announced a succession plan that would eventually pass control of the company to chief executive Mark Parker. But Knight isn’t going anywhere yet: When I visit Beaverton on a rare sunny Pacific Northwest day, my tour guide makes sure to point out the glass-walled office where the company co-founder meets with athletes and reviews new products.
Nike calls its headquarters a “campus,” and the place—with its man-made lake and undulating running trail and blossoming cherry trees—is undeniably beautiful, in a sleekly corporate way. Still, it’s hard to shake the Area 51 vibe: Tight-lipped guards in trim red Nike shirts and sleek black Nike caps roam the grounds in pairs. And you can’t wait anywhere without encountering the tarantula eye of a camera (or eight) staring back at you.
The company has good reason to be paranoid. Last July, a grand jury in Portland indicted former Nike promotions manager Tung Wing Ho and two other men for conspiracy to transport, receive, and sell at least $679,000 worth of stolen goods: Surveillance footage had captured Ho leaving work with an overloaded duffel bag. After obtaining a search warrant for his home, the FBI and local sheriff’s department found 1,941 pairs of rare Nike sneakers stacked to the ceiling. Ho pleaded guilty in late April; he will be sentenced later this year.
If Ho had been able to cart so many actual sneakers out of HQ, what was to stop competitors from getting their hands on designs for upcoming shoes? Nike couldn’t risk the leak turning into a flood. It erected tall gates around the edge of the property, created military-style checkpoints, and installed a range of new cameras with a state-of-the-art surveillance suite to control all the feeds.
“We’ve had to move some teams around, and we’ve added a lot more security to the entrances of the buildings,” my tour guide explains. “They used to be very open, with very big display cases on the athletes, but with more money and more people poking around…” He shrugs. “Bad things have happened.”
We pass the Innovation Kitchen, the nerve center of Nike’s design operations. With its blueprints and prototypes and carefully cataloged “library” of every shoe Nike has every produced, the Kitchen, which is off-limits to all but a small cadre of designers and researchers, has taken on mythic stature in the minds of sneakerheads; it is the fount, the wellspring, the womb from which the best sneakers in the world have burst.
Which is why Nike threw such a fit and unleashed such a legal furor over the recent defection—to Adidas, no less—of three Kitchen superstars, designers Denis Dekovic, Mark Miner, and Marc Dolce. The Croatian-born Dekovic had joined Nike in 2005 and climbed the ladder until he was the senior design director for soccer shoes. Miner, the youngest of the group, heavily tattooed and perpetually dressed in a black V-neck T-shirt, had come to Nike from Michael Kors in 2007 and specialized in running shoes. Dolce helped develop some of Nike’s most coveted products, including the Air Force 1, a pillar of hip-hop culture that is meant to be kept spotless white.
In 2014—discouraged at what they would later describe as a repressive atmosphere in the Kitchen—Dekovic, Miner, and Dolce began discussing the creation of their own design studio. Adidas duly extended the trio an offer, which they accepted: Leave Beaverton. Open that studio under the Adidas banner in Brooklyn. Become the anti-Nike: small and nimble, freethinking and anti-bureaucratic, empowered to channel ideas straight from the streets and into production.
Nike retaliated by filing a $10 million lawsuit alleging breach of contract, along with a host of other charges, including civil conspiracy. Central to the complaint was the contention that the three designers were providing Adidas with trade secrets. Nike alleged that Dekovic had copied the contents of his corporate laptop before departing and sent himself a file of confidential design documents.
“After examining 27 electronic devices and after the designers produced over 69,113 pages of information in discovery, Nike still has no evidence of any actionable misappropriation of trade secrets,” an attorney for the designers wrote in a motion in April. Two months later, Nike and the designers agreed to settle the suit for undisclosed terms.
Adidas put the three designers on the payroll shortly thereafter, setting them up smack in the middle of the world’s preeminent streetwear scene.
If Beaverton is big and glistening and heavily fortified, Adidas’s U.S. headquarters a few miles downriver in Portland proper, in a much smaller steel-and-glass cluster near an old shipping yard, feel downright homey. The only security is a tired woman with gray hair, who encourages me to write my name in Sharpie on a white sticker.
Paul Gaudio, Adidas’s global design director, works out of an office on the east side of the building. A veteran Adidas man—he has spent 20 years at the company, with only a brief interlude at Norton Motorcycles—Gaudio has tight-cropped silver hair and hooded slate-blue eyes. The day we meet, he is wearing a black T-shirt, straight-leg jeans, and a pair of battered leather boots. His wife’s initials are tattooed across his knuckles.
On the table before us is a pair of Yeezy 750s. The shoe, he suggests, with its $350 price tag and limited-edition cache, isn’t so different in function from, say, an $845K Porsche 918 Spyder—an all-but-unobtainable product that lifts the profile of the brand as a whole. “There’s a halo that comes off it,” he tells me, picking up one of the shoes, “and you hope it casts light on everything else you do. It’s a statement piece, right? You pull some of what’s so interesting about it into the broader offerings.”
“I have all the respect in the world for a competitor like Nike, but
they don’t intimidate us in any manner, because they’re heavy,
they’re big, they’re oversaturated in the market, and I think people
are looking for a change.”
Twitter
Behind him is an array of shoe sketches that I promise Adidas I will under no circumstances disclose, but suffice it to say that many of them are beautiful and strange, like talons, or the type of sharpened spaceship that might come shrieking out the ass of a Death Star. The sketches, cooked up by a crew of young designers, typify the provocative work Gaudio wants to see come out of the Brooklyn satellite office. “We can reward young talents by letting them rotate through locations like that,” he says.
Gaudio estimates at least a couple of dozen employees will work in the Brooklyn space, which he says will have its own social-media center and consumer researchers. The leash will be intentionally long, he adds, the creatives encouraged to play with concepts that might’ve never been entertained under the old Adidas—or at Nike.
The executive who allegedly helped persuade Nike’s troika to flee for Adidas is Brian Foresta, the vice president of design for basketball, a sport where Adidas has an especially steep uphill climb. Foresta (who also used to work for Nike) is 41 but could pass for two decades younger: He wears his dark hair lacquered straight across his head and his beard long but trimmed. His office is a carpeted and densely curated lair, like a room-sized mood board. There are pictures of A$AP Rocky and Biggie Smalls, swatches and splashes of color pinned to tackboards, a luxurious white couch with a plush rainbow-colored Adidas pillow.
“When brands take big swings, it’s like a sugar rush—it’s a spike, and then it kind of tails off,” Foresta tells me. “I’ve seen us do that in the past, and that’s not what we want to do.” Instead, he says, he’s determined to double down on projects like the Crazylight Boost—a sneaker line debuted at All-Star Weekend by Timberwolves small forward Andrew Wiggins, the 20-year-old NBA Rookie of the Year—and continue to invest heavily in up-and-coming talent.
“I have all the respect in the world for a competitor like Nike,” Foresta says, “but they don’t intimidate us in any manner, because they’re heavy, they’re big, they’re oversaturated in the market, and I think people are looking for a change.”
Of course, to Nike, “oversaturation” is another word for domination. Adidas may have momentum. It may have an underdog’s spunk. But Nike has won the sneaker wars so decisively for so long that it could coast for years on just its heritage models. The Jordan brand alone has more than 20 times Adidas’s share of the American basketball-shoe market.
During my Beaverton visit, I attend an event to celebrate the twenty-fifth anniversary of Nike’s seminal Air Max shoe, known for its ultra-cushy heel. Twenty-odd journalists are invited, including a guy from GQ Korea, a loud but amiable Brit, one Brazilian, and a pair of Japanese women who have brought along their own translator. We enjoy a three-course meal overlooking the lake and witness presentations on the history and cultural relevance of the Air Max, and then the iconic Nike designer Tinker Hatfield emerges and there is a moment described in the official schedule in language that may or may not be Standard American English as “Tinker comes to the big punctuation and moves to unveil the Zero,” the Zero being the new Air Max Zero, a shoe that, in the personal opinion of this correspondent, actually looks less than earth-shattering and maybe a little K-Swiss-ish.
After the ceremony concludes, I am given eight minutes to speak one-on-one with Hatfield, and by “one-on-one” I mean it’s just the two of us plus at least five extremely attentive PR people—Hatfield almost never gives interviews, and when he does, they are tightly scripted affairs. Hatfield examines my shoes and looks as if he’s just smelled roadkill. I am not wearing Nikes. I am wearing old boots. A long and awkward moment passes between us.
I ask Hatfield how closely he monitors the competition. Adidas, after all, is going space-age, too. Does it worry him?
“When you’re busy aggressively going into the future, you don’t have to worry who’s behind you,” he says. “If somebody happens to pass us, it’s just because they’re a better—” here he pauses and corrects course—“because we didn’t do the right thing. Pretty hard to pass us right now, because we train, I think, in a pretty smart way.”
Before leaving campus, I sit down with Leo Chang, the basketball design director and the man charged with keeping Nike dominant in the NBA. Chang, long-haired and soft-spoken, is only 35; he joined Nike as an intern a decade and a half ago. He has since graduated to overseeing the top three signature sneaker lines among active players—LeBron, Durant, and Kobe—and is, in his own sphere, as much of a titan as they are.
Our meeting takes place in a conference room in the Mia Hamm Building; Chang sweeps in wearing a black duster coat and clutching a grocery bag full of shoes. He upends the bag: A Technicolor assortment of the new KD8s cascade onto the table. Aside from the LeBron line, Kevin Durant’s signature kicks are Nike’s single biggest individual earner, with a 2014 haul of $195 million.
Now, suddenly, I am one of the few human beings besides the Kitchen staff to see the shoes.
“These don’t have the logos on them,” Chang says. “We were trying to keep it tight, so they don’t leak.” He leans toward me. “There’s people everywhere that are trying to get that first peek. It’s ridiculous. It’s changed the way we work.”
The KD7s, released last summer, had a forefront strap that could be worn down, over the laces, or up, like a middle finger. The 8’s are sleeker, meaner, lighter looking. The uppers are woven of a kind of rubberized yarn, similar to the Flyknits’; the soles sport a brand-new articulated ten-millimeter-thick Zoom Air “bag”—designer-speak for the translucent sac native to the Air line.
Chang geeks out on materials and science for the next ten minutes solid, no interruptions. He talks about high-performance foams and lateral force. He talks about a triangular feature on the reinforced heel cup, which is meant to look like the fang of a saber-toothed tiger, a saber-toothed tiger being the subject of Kevin Durant’s latest calf tattoo and apparently an animal dear to his heart.
He rattles off the various color combinations that will be available, which will include “fun, bright colors. But KD also likes things that are a little bit more sophisticated and grown-up, so we want to be able to show that breadth and show that character of him.”
I stare at the shoes and sit on my hands: They are too pretty to touch. Eventually, Chang stuffs the prototypes into the bag, and I walk with one of the PR guys to the front entrance.
A few weeks after I return home, Nike releases an avalanche of new shoes: a $200 pair of “laser orange” LeBrons, an “Independence Day” run of the Kobe X’s with stars on the toes, and a limited-edition version of its Huarache Premiums, coated in an iridescent finish that makes the shoes glow like tiger beetles. Through the summer they will keep coming, a mix of major Nikes and blog-bait limited editions. The KD8 will drop to great acclaim, and teaser photos will emerge of a new Tech Fleece footwear line, a sneaker series using the same cozy fabric as swoosh sweatshirts. Nike will also star in The Rise of Sneaker Culture, a 150-pair summer exhibition at the Brooklyn Museum that officially canonizes the sneaker as art.
But for now, there is just the Nike campus, majestic in its quiet. The golfing green, where Tiger Woods once drove a ball so far that it nearly shattered the windows of the Roger Federer Building, glows like an emerald. We pass a display devoted to the evolution of the Air Jordan line and a hall named for Steve Prefontaine, a pupil of Nike co-founder and track coach Bill Bowerman, and the first genuine Nike star.
Inside are shoes and jerseys worn by Pre and an old quote from the master runner himself: “Somebody may beat me, but they are going to have to bleed to do it.”
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