Jordan Turns 30: How Did It Become the Most Successful Sneaker Brand? | QDaily Business History

The advantage of having thirty years of brand history is that any slice of the story is enough to become ad material.

Eleven years on, "Air" Michael Jordan is back in China.

Compared with his last visit, which was about promoting basketball, this trip is more commercial — he came as a team owner promoting his Charlotte Hornets and, more important, to drum up publicity for the 30th anniversary of his own Jordan brand.

In five days Jordan passed through Hong Kong, Shenzhen and Shanghai, attending the Jordan 30th anniversary events and appearing for the "Wings" charity project in all three cities.

On the evening of the 12th, Jordan's conversation with the legendary designer Tinker Hatfield on the Shanghai Bund lasted less than half an hour, but the people in the audience had waited far longer. Liu Xiang, Li Na, Hiroshi Fujiwara, Chen Jianzhou, Wilber Pan — none of these names was even given an introduction, and the lights never found their faces, because Jordan was about to arrive.

Tinker Hatfield and Michael Jordan

Wherever Jordan goes, the crowds are as thick as they were eleven years ago. The difference is that the young people who turn out for a glimpse of their idol now know more about clothes: almost all of them wore the athleisure look of the past few years.

Fans packed the "Flight Bureau" on the Shanghai Bund, inside and out, every one of them in a pair of Air Jordans. Most have probably never watched a full Jordan game, but they can recite this year's Jordan retro colorways from memory.

Outside the "Flight Bureau" on the Shanghai Bund

Thirty years after it was founded, the Jordan craze shows no sign of cooling. As Nike's most famous sub-brand, Jordan booked $2.6 billion in sales last year alone, a record.

In 2014, Jordan himself took in $100 million from Nike and other partners. Or, for a plainer number: in North America, where Jordan is from, the Jordan brand holds 58% of the entire basketball shoe market. Add every other Nike basketball line and that figure becomes a slightly frightening 92%.

Turning his influence on and off the court into sales that still refuse to fall, and into a large body of loyal Jordan fans, took thirty years of joint work by Jordan and Nike. Riding the NBA's push around the world, it became the most successful commercial marriage in the history of sport.

A $500,000 Contract Signed 30 Years Ago Is Now a Multibillion-Dollar Business

In 1984, when Nike signed Jordan for $500,000, it can hardly have imagined that this young man out of North Carolina would one day bring in several billion dollars a year. Jordan is probably glad of that decision too: years after his career ended he can lie at home and still collect steep licensing fees. A naming-rights infringement case this year brought the figure into the open — Jordan's fee for each naming deal was put at about $10 million.

By Forbes' celebrity rankings, this retired player out-earned every active NBA player last year. LeBron James led the active players with $72 million, and his signature shoe sold $340 million in North America — but Jordan shoes sold eight times as much as James's. Drop Jordan's own earnings into the list of the world's best-paid athletes and only the man at the top, the boxer Floyd Mayweather, comes out ahead of him.

Thirty years have, if anything, only kept raising the value of the Jumpman logo. In 2014 the Jordan brand brought Nike $2.6 billion in sales, $600 million more than in 2012. It may be the most successful contract Nike ever signed: after Jordan, a company that had made its name on running shoes gradually took over the basketball court, and the star endorsement became the classic model of sports marketing.

Black Culture, the Reach of Television and Michael Jordan's Story Made Jordan Shoes a Synonym for Cool

Through the 1980s and 1990s, Jordan sneakers gathered up nearly everything cool about the era: bold design, avant-garde ad directors, Jordan's record on the court and his dramatic career. The line's subversive streak was there from the very first Air Jordan 1 commercial.

Because the red-and-black Air Jordan I Bred broke the league's uniform rules, the NBA banned the shoe and fined Jordan $1,000. When Nike founder Phil Knight heard, he said: "Just pay the damn fine!" The commissioner then told Nike that if Jordan wore the shoe again the fine would rise to $5,000.

So each time the shoes came onto the court, Nike paid Jordan's fine. In the second half of the season the company shot a commercial called Banned, in which the camera slides down from a close-up of Jordan to reveal a Jordan I blacked out like censored footage. It was full of defiance.

Those famous Jordan posters

Air Jordan 1 ad: Banned

A comic television spot in 1988 was directed by the young Spike Lee. A director later known for films about Black life, he said: "In the history of American business, no company had ever made a Black man its spokesman. What Phil Knight did was revolutionary."

Television advertising carried far more weight then than it does now. The NBA was pushing its business around the world, and if you watched a game on television and saw Jordan score 65 points, the Jordan shoe ad that came right after it was astonishingly persuasive. That reach crossed onto the big screen as well: Space Jam, made in 1996, was called Jordan's "88-minute commercial." The $80 million mix of live action and animation ended up taking more than $230 million worldwide.

This year the story of Bugs Bunny and Jordan was wheeled out again — the advantage of thirty years of brand history is that any slice of the story is enough to become ad material

Turning Jordan's Story into Design — Every Shoe Becomes a "One-of-a-Kind Moment"

That sense of story shows up in the shoes themselves. Tinker Hatfield, who has designed Jordan shoes since the Air Jordan 3, said in an interview on October 12 that every stage of Jordan's career could serve as design inspiration: "This pair is from the last game before his first retirement; this pair is from after his comeback..."

New shoe technology and new design kept filling out the Jordan brand. In his last regular-season game in New York before his second retirement, Jordan pulled the original Air Jordan I back on for the farewell and scored 42 points. Countless stories like that gave the Jordan line the capital to keep reissuing shoes.

The Air Jordan I "Bred" would later be reissued a full six times

As Jordan's achievements on the court grew, every detail about him was magnified, turned into a symbol and absorbed into the legend. The University of North Carolina, where he first made his name, wore blue and white, and that combination became a classic second only to the Bulls' red and black — the shade is known as Carolina Blue. Last Christmas Nike's Air Jordan 11 Legend Blue sold out within three hours of going on sale; that single style did more than $80 million in its first week.

Dozens of Shoes, Sold Over and Over: Wearing Jordans Became Collecting, Fashion and a Way of Life

This collectors' market formed gradually. After Jordan retired, the line kept putting out retro versions; in 2014 alone it released close to a hundred different Jordan shoes. Lewis Chang, who runs a streetwear shop, described last year this way: "More retro styles came out last year than in AJ's previous thirty years combined."

Air Jordan has reached its 29th generation, and a dozen or so of the more popular models are reissued, put on shelves, sold in limited numbers and cleaned out, again and again. The sneaker data site Campless estimates the limited-edition sneaker market at about $1 billion, 96% of the circulating stock being Jordan and Nike shoes.

Tinker Hatfield told us that when he designs a shoe prototype he thinks only about Jordan's personality and about function, never about fashion or trends. Nike, though, is genuinely skilled at working the limited-edition market, and it knows that only a handful of models are the levers that move the whole thing.

Take the Air Jordan V "Oreo" and the Air Jordan X "Steel," both released in 2013 at $170. Nike shipped nearly four times as many Oreos as Steels, so the Steel's resale price ought to have been the higher of the two — but demand for the Oreo was greater, and its price finally settled at around $225.

What the LeBron

Another example is the LeBron 10 "What the LeBron." The 2013 run was tiny and, as expected, sold out at once. In 2014 Nike put the shoe out again in far greater numbers — and buyers still took it for a strictly limited drop.

There is no end to these ways of training the fans. The way retro releases are made and sold leaves the Jordan line with almost no inventory to worry about, and it does not need to spend a cent on advertising.

"What Nike has done in turning the Jordan brand from a simple basketball brand into something far closer to a lifestyle is incredible," Eric Tracy, an analyst who has followed Nike for years, told Forbes. "In essence it has captured a much bigger target market."

Nike has nonetheless been trying all along to change the Jordan brand's image, because pure hype is hard to sustain. In recent years it has developed some new models and signed several endorsers, with limited effect; the retros still sell best. In Greater China this year, Jordan released its first specially made commercial, cast entirely with young Chinese basketball players. That may be a signal that Nike has found Jordan yet another use: as the most recognized name on a basketball court, it wants to keep using him to reach a new generation of young Chinese.

(Graphics: Lin Yuyao)