Nike aced as Federer dons new wardrobe from Uniqlo

Roger Federer shows off his new sponsors at Wimbledon on Monday Keystone

In the cutthroat world of celebrity athlete endorsement, Nike has just been served the equivalent of an ace by Japanese fast-fashion retailer Uniqlo.

This content was published on July 3, 2018 - 14:54
Peter Wells, Financial Times

Nike was among the biggest decliners in the Dow Jones Industrial Average on Monday as it surrendered some of last week’s strong share price gains and as investors digested news that Swiss tennis superstar Roger Federer has ended his longstanding relationship with it in favour of an apparel deal with Uniqlo reportedly worth more than $300 million (CHF298 million).


Plenty of air had been pumped into Nike’s share price, which leapt 11.1% on Friday to a record high after the Oregon-based group revealed sales in North America turned positive in its fiscal fourth quarter for the first time in a year and lifted its revenue growth guidance for 2019.

Federer had been a longtime Nike athlete, wearing the company’s shoes and clothing for more than two decades and through all of his record 20 grand slam singles titles.

But, as defending champion, he commenced his campaign for a ninth Wimbledon singles crown on Monday sporting a Uniqlo stand-up collar shirt and shorts. Fast Retailing, the brand’s Japanese parent, said in a subsequent statement on Monday it had signed the tennis superstar as its newest global brand ambassador. 

The deal, worth more than $300 million over ten years, according to numerous media reports, would be among the most valuable athlete apparel deals ever signed and is a big step up from Federer’s previous $120 million over ten years deal with Nike that expired on March 1 this year.

Given Uniqlo is not a maker of sports shoes, the Swiss maestro is still trampling the grass of the All England Club in his personalised pair of Nikes and is likely to remain in those kicks for the time being.

Federer effect

Uniqlo is not best known for its sportswear offerings, but the signing of Federer, arguably one of the most recognisable faces in global sport, could give the line a bigger boost than the company’s previous signings.

In 2012, Uniqlo signed Novak Djokovic to a five-year deal soon after the Serb ascended to world number one. Kei Nishikori has long been a global brand ambassador, but his appeal is most pronounced in his home country of Japan.

Tadashi Yanai, Uniqlo’s founder and chairman, said in a statement the partnership with Federer would be about “innovation” on and off the court. “Uniqlo will help Federer continue taking tennis to new places, while exploring innovations in a number of areas including technology and design with him,” Yanai added.

The loss of Federer may not be a huge problem for Nike, which still has plenty of talent in the tennis world to fall back upon. These include men’s world number one Rafael Nadal, Grand Slam queen Serena Williams and next-gen stars like Sloane Stephens and Nick Kyrgios.

Although Federer might be a big name in sport, tennis apparel and footwear is a “drop in the bucket” for Nike, said Brian Yarbrough, retail analyst at Edward Jones. The company’s bread and butter are things like running, basketball and football.

Not a basket case

With that in mind, investors will be keeping an eye on the decision by LeBron James to take his talents to … Los Angeles and join the city’s basketball team, the Lakers, in a four-year $154 million contract.

LeBron James has plenty to smile about Keystone

The move by James, who is one of the few Nike athletes to have signed a lifetime contract with the sportswear maker thought to be worth more than $1 billion, could give a boost to jersey and shoe sales as fans on the West Coast pick up new kit. For the past eight consecutive seasons, James has led his various teams to the NBA finals, including a historic first title for the Cleveland Cavaliers in the 2015-16 season.

Nike last week reported revenue of $36.4 billion in the 12 months to May 31 and has a market cap of $128.4 billion. Fast Retailing reported record revenue of ¥1.86 trillion ($16.8 billion) in the 12 months to the end of August 2017 and has a market capitalisation of $45 billion. 

Nike shares finished Monday’s session 1.7% lower at $78.35, making it the third-worst performer in the Dow, which fought to end 0.2% higher. Its stock price is up 25.3% so far in 2018.

Fast Retailing shares are up 10.1% so far this year, outpacing a 6.7% for Japan’s benchmark Topix.

Federer, the world number two and top seed for Wimbledon, won his first-round match at the tournament in straight sets on Monday.

Nike could not immediately be reached for comment.

Copyright The Financial Times Limited 2018

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