Mbappe leaves Nike, signs with on as Swiss sportswear maker forays into soccer
It adds to pressure on Nike (NKE.N), which has recently lost other high-profile players to rivals, as newer brands make inroads into the global sportswear market.
French soccer star Kylian Mbappe has ended a two-decade partnership with Nike to join fast-growing Swiss sportswear brand On, giving the Roger Federer-backed company a marquee name for its push into soccer and handing the US giant another high-profile defection.
The financial terms of the deal have not been disclosed, though On (49G.BN), said that the structure includes both cash and equity components, without providing further details.
The move underlines On's ambitions to expand beyond running and tennis into soccer, where it plans to launch its first boots in 2027 and has brought in former France star Thierry Henry as director of football.
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It adds to pressure on Nike (NKE.N), which has recently lost other high-profile players to rivals, as newer brands make inroads into the global sportswear market.
Mbappe's move to On ends a relationship between the French national team captain and Nike that dates back to 2006 when he was 9 years old, and comes on the heels of Nike's loss of recent World Cup winner Spain's Lamine Yamal to Adidas.
"We are proud of what we achieved together on and off the pitch. As he moves into the next phase of his career, we wish him continued success for what comes next," Nike said in a statement.
His exit comes despite Nike's foothold in France, where the company has secured an extension to the French national team's long-running kit-supply agreement until 2033-34.
The US company last year also lost its more than two-decade-long status as the Premier League's match ball supplier to Puma, although it has won the contract to become the German national teams' official kit and equipment supplier from 2027.
On's US-listed shares pared premarket gains and were slightly higher in trading on yesterday (18 September), while Nike shares were little changed, indicating the news had limited impact on investors.
The Swiss company is looking for growth in the Americas, which account for more than half of its revenue. It has focused on full-price sales, but has struggled in the region this year amid choppy economic spending.
A loss for Nike amid turnaround push
Nike CEO Elliott Hill, nearly two years into his tenure at the helm of the company, has pushed to reset Nike's strategy in part by refocusing on key sports like soccer and running. Losing a star player like Mbappe could undercut those efforts as investors grow impatient with the turnaround progress.
Still, Nike shareholders are unlikely to view Mbappe's move as a big blow to the brand, with sentiment already "decidedly negative," said Mari Shor, senior equities analyst at Columbia Threadneedle, which holds Nike stock.
Investors are more focused on Nike's product innovation to drive revenue growth, she added.
Nike had increasingly leaned on Mbappe as one of the sport's leading global ambassadors, as soccer star Cristiano Ronaldo - also the company's ambassador - enters the latter stage of his career.
The Real Madrid forward and 2018 World Cup winner was a centerpiece of Nike's soccer marketing at this year's Fifa World Cup, most recently receiving signature editions of its Mercurial boots.
"Once again it (football) has led me to one of the biggest changes in my life. Now, I find myself surrounded by innovators who dream of the same things I do," Mbappe said on his social media accounts.
