New Balance vs Nike

New Balance was founded in 1906 by William J. Riley, a British immigrant in Boston who made arch supports inspired by the way chickens balanced on three points. Riley's company — New Balance Arch Support Company — made customised arch supports and insoles, selling to workers who spent long hours on their feet. Riley believed he could design a shoe that provided perfect balance through an arch support with three points of contact, the same stability system he observed in chickens. For its first forty years, New Balance focused on arch supports and orthopaedic shoes rather than athletic footwear.

The company produced its first athletic shoe — the Trackster — in 1960, a waffle-soled running shoe designed for serious runners. The Trackster sold through mail order and was adopted by several Boston-area running clubs, building a small but intensely loyal customer base that valued performance over marketing. New Balance's approach was distinctive from the outset: no celebrity endorsements, no advertising stars, no professional athlete sponsorships that drove Nike's and later Reebok's marketing. The brand would be validated by the performance of the shoe, communicated through specialist running communities.

Jim Davis purchased New Balance in 1972 for $100,000 on the day of the Boston Marathon — a coincidence that felt intentional in retrospect. Davis had been working in running shoe retail and recognised that the existing models were inadequate for the running boom that was beginning. He invested in manufacturing, expanded the product line, and made the decision that would define New Balance's identity for the following 50 years: maintain manufacturing in the United States. While Nike outsourced production to Asia in the 1970s, New Balance kept factories in Massachusetts and Maine. The US manufacturing carried real cost disadvantages — American-made New Balance shoes cost significantly more to produce — but Davis believed the authenticity was worth the premium.

New Balance developed a distinctive width sizing system — offering shoes in narrow (2A), standard (D), wide (2E/4E), and extra-wide formats — that addressed a genuine customer need that competitors ignored. People with wide feet who had been unable to find comfortable athletic shoes found New Balance through necessity and became loyal customers. The 574, 990, and 993 models — chunky, deliberately unglamorous designs built for comfort and durability rather than style — became associated with a certain archetype: the practical American professional, the suburban dad, the person who cared more about whether their feet hurt than whether their shoes appeared in a magazine.

New Balance underwent one of the most striking brand transformations in contemporary fashion. The "dad shoe" aesthetic that had previously been a liability became a cultural asset as streetwear and fashion embraced chunky, retro athletic footwear. Collaborations with Joe Freshgoods, Aimé Leon Dore, Salehe Bembury, and other influential designers created limited-edition versions of classic New Balance silhouettes that sold out immediately and traded on secondary markets at significant premiums. New Balance revenue grew from approximately $3.3 billion in 2018 to over $7 billion by 2023 — the fastest organic growth period in the company's 118-year history. The brand Jim Davis had bought for $100,000 on Marathon day had become a billion-dollar global fashion statement.

Phil Knight was a middle-distance runner at the University of Oregon who wrote a business school thesis at Stanford in 1962 arguing that high-quality Japanese athletic shoes could undercut the German brands — Adidas and Puma — dominating the American market. After graduating, Knight flew to Japan, visited the Tiger shoe factory (now Onitsuka Tiger), and persuaded them to let him distribute their shoes in the western United States. He had no money, no warehouse, and no customers. He sold the first pairs from the boot of his car at track meets.

When the company — then called Blue Ribbon Sports — needed a logo for its own shoe line, Knight asked graphic design student Carolyn Davidson to create something that conveyed movement. She presented several options; Knight chose the swoosh, which he reportedly did not love: "I don't love it, but it'll grow on me." Davidson was paid $35. The company was renamed Nike — after the Greek goddess of victory. Years later, Knight gave Davidson a gold swoosh ring set with a diamond and an undisclosed amount of Nike stock in belated recognition.

Nike signed Michael Jordan in 1984 for $2.5 million over five years — a record athlete endorsement deal at the time. Jordan had preferred Adidas; Nike had to work to convince him. The Air Jordan 1, released in 1985 in Chicago Bulls red and black, was banned by the NBA for violating uniform rules. Nike paid Jordan's fines — $5,000 per game — and turned the ban into a marketing campaign. The Air Jordan became the most successful athletic shoe franchise in history, eventually generating over $5 billion annually.

Nike's 2018 campaign featuring Colin Kaepernick — the NFL quarterback who had knelt during the national anthem to protest police brutality — was one of the most polarising advertising decisions in corporate history: "Believe in something. Even if it means sacrificing everything." Nike stock fell 3% on the announcement. Calls to boycott Nike trended on social media. Nike's online sales increased 31% in the following days. The campaign won the Emmy Award for Outstanding Commercial.

Nike reported fiscal year 2025 revenues of $46.3 billion — down 10% from $51.4 billion in 2024 — its steepest annual decline in decades. Net income fell 44% to $3.2 billion. The company had over-indexed to direct-to-consumer channels and pulled back from wholesale partnerships, then had to reverse course. New CEO Elliott Hill — who rejoined after a 32-year career at Nike — launched a restructuring strategy and cut approximately 1% of corporate headcount to redirect resources toward innovation, athlete collaborations, and international expansion. Nike remained the world's most valuable sportswear brand by a significant margin. The question was whether the company that had defined athletic culture for four decades could reinvent itself quickly enough to stay there.