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Nike Remains Most Valuable Apparel Brand, While Zara Narrows In on H&M

Despite recent HR and sales woes, Nike has maintained its title as the world’s most valuable apparel brands list, according to Brand Finance, a brand valuation and strategy consultancy.

Nike came out on top of Brand Finance’s Apparel 50 list for 2018. The performance footwear and sportswear giant bested fast-fashion retailers H&M, Zara and rival Adidas for the top spot. However, Brand Finance downgraded Nike’s brand value to $28 billion, a 12 percent decrease from the previous year.

Nike is having a less than stellar year. The company was hit hard by taxes, seeing a $921 million operating loss in Q3 and is in the midst of a misconduct scandal with two high-level executives left the company earlier this month. Nike struggled particularly hard in the North American market, where it continues to see decreased popularity among the teen demographic.

The report suggested that if Nike does not effectively address the issues that are causing it to fall out of favor it may very well face further decreases in strength and value in the coming year.

Part of Nike’s dilemma is Adidas’ unstoppable momentum. The German athletic footwear giant sits at No. 4 on the list with its brand value up 41 percent to $14.3 billion from the year prior, due in large part to its rapidly growing sporting and casual categories.

“The top four brands in apparel are here to stay. However, steep competition to maximize on the sporting apparel trend, coupled with increased choice and information for the consumer could threaten Nike’s future position in the rankings,” Richard Haigh, Brand Finance managing director, said. “This year, Adidas’ brand value is further encroaching on the incumbent champion, which has suffered significant loss to brand value.”

Meanwhile, Under Armour dropped the ball. The performance apparel company recorded the biggest brand value drop in the table, down 36 percent to $3.8 billion after its failed attempts at basketball shoes and other products.

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In the world of fast-fashion, H&M continues to reign supreme at the No. 2 spot, however its brand value decreased 1 percent to $19 million in 2018. Like Nike, Brand Finance said the Swedish company has its own set of sales and PR struggles and is feeling pressure from Spanish competitor Zara. The retailer’s brand value increased 21 percent to $17.5 billion, narrowing the gap between the two brands as it comes in at No. 3.

“Empowerment to the consumer is having a wide-spread impact on the industry, allowing fast-fashion retailer Zara to reign supreme on the high street, challenging H&M and leveraging both online and offline sales platforms to meet consumer demands for variety, fashion and low prices,” Haigh continued.

According to Brand Finance, consumers in emerging markets are increasingly choosing luxury over commoditized goods, resulting in the top four luxury brands reporting strong brand value growth (Hermes up 36 percent to $11.3 billion, Louis Vuitton up 17 percent to $10.5 billion, Cartier up 45 percent to $9.8 billion and Gucci up 25 percent to $8.6 billion).

While Hermes took the lead because of it capability to achieve strong revenue growth, Cartier was the biggest brand value winner among the four, hiking to No. 7 from its former No. 10 ranking.