Nike Rediscovers Advertising

Marketing is driving sales at retail and apparel companies like never before. Gap's (GPS Quote) catchy television commercials for khakis are credited with goosing sales. An advertising blitz helped Intimate Brands (IBI Quote) lure 2 million potential shoppers to its Victoria's Secret Web site last Wednesday, the day of its annual fashion show.

The tie between advertising and sales is even more striking at Nike (NKE Quote), which has been a pioneer in building consumer demand with clever, compelling ad campaigns. In the year ended May 1998 -- one of the toughest in Nike's history as sales growth slowed to 4% and earnings dropped 40%, excluding a restructuring charge -- the company spent $314 million on advertising airtime.

In the current fiscal year, Nike is spending just $240 million on advertising airtime, says spokesman Lee Weinstein, who suggests that there's a potential link in the decline in ad spending and sales. ...