Nike is struggling to sell basketball shoes. Klutch Sports founder Rich Paul says market saturation and Gen Z's focus on utility are killing the signature sneaker era. The shift marks a massive departure from the Michael Jordan-led boom of the 1990s.

Basketball signature shoes’ popularity saw a sudden spike with Michael Jordan. Since then, Nike and even other brands have been very prompt in flooding the market with signature shoes for star players. According to Paul, it could be a big reason for the fall.

“There's a lot of signature guys. There are so many signature athletes,” he told Max Kellerman on the Game Over podcast. “Every company has a signature guy—multiple signature guys.”

“I don't know if [players] are less popular, but the kids are less into all the things that we were into as it pertained to a player,” Paul added when Kellerman asked if players’ popularity was the factor. “We love to relive our teenage years, where things were what we thought was the hype.

Nike's deep roster of star athletes has saturated the market. These athletes include veterans like LeBron James and Kevin Durant, as well as younger stars like Ja Morant, Devin Booker, and Jayson Tatum.

Recent market data support Paul's assessment of a shifting industry.

The $5.58 billion sneaker market shows a harsh truth; sales of performance shoes fell by 8% by the middle of 2025. The old model of athletes endorsing products is falling apart because 46% of people now care more about fashion than sports.

This generational shift highlights the core of Paul's argument.

“Well, there ain't that many kids that want signatures from,” Paul added. “They don't want signatures…These kids don’t care about the new nothing. They care about what they think is cool.”

This gap can be measured: only 39% of Gen Z put sports first, while 51.4% prefer everyday usefulness. Nike's 86% market share can't keep up with changing tastes.

More and more, young people see signature shoes as impractical luxury items instead of status symbols.

Paul’s analysis provides a fresh perspective on Nike’s falling stocks. Rather than putting the burden of blame on the sport, one of the UBS analysts shifted it to the sneaker giant. 

UBS analyst blames Nike for its falling stocks

In 2021, Nike had a great year, recording the highest stock price in its history. Since then, every year the annual change has been negative.

While basketball is being considered as the biggest cause in the recent fall, UBS softlines analyst Jay Sole has provided a fresh perspective.

According to Sole, in the last few years, the company has shifted its core principle of being a performance brand. It has now become a sportswear brand, which is primarily in the fashion category.

“We believe that for Nike, the fashion trend has moved away from them, and now many customers have moved on to other brands because they were never consumers of Nike sports products,” Sole said. 

The analyst argues these fickle consumers lacked brand loyalty and migrated as trends evolved.

Sole added that the brand should go back to limiting its sportswear to around 30 percent. 

Nike needs to stop putting fashion first and go back to focusing on performance. Gen Z will be loyal again if you are real, not if you follow trends.

What do you think are the reasons behind Nike’s falling stock prices? Let us know in the comments section.

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Written by

Nandjee Ranjan

Edited by

Utsav Gupta