Nike Cuts Ties with Livestrong, Will Stop Manufacturing Iconic Bracelets
Livestrong made headlines once again this month, and once again, the headlines weren't good for the nonprofit organization. Nike, Livestrong's largest partner for the past nine years, has announced that it will stop producing merchandise for the cancer survivor network's webstore, including the famed yellow wristband that the sportswear company first developed in 2004.
"Nike has made the decision to stop producing new LIVESTRONG product after its Holiday 2013 line," the company said in a statement on Tuesday. Nike will fulfill its contractual obligations to the organization through 2014, and said it would "continue to support the LIVESTRONG Foundation by funding them directly," although provided no further information on what that would mean for the troubled nonprofit.
Nike has proven instrumental in elevating Livestrong's profile globally, having been arguably as influential as founder Lance Armstrong. While the nonprofit launched in 1997, it wasn't until Nike came on board in 2004 and debuted its silicone wristbands that Livestrong became a household name. Since then, 87 million of the bracelets have been sold and Nike has helped raise more than $500 million for cancer survivors.
The foundation wasn't alone in benefitting from the relationship: Nike sold $150 million in Livestrong-branded products in 2012. Some of that was given over as royalty payments to the organization, but the apparel company still turned a profit on the products. The revenue, and the goodwill of being associated with the nonprofit, evidently did not outweigh the negativity of being associated with the disgraced Armstrong, who admitted to using performance enhancing drugs during his record seven Tour de France wins. Nike ended its official sponsorship of Armstrong in October 2012, after he was stripped of those Tour de France titles.
In a statement, Livestrong reaffirmed that "the Foundation created and owns the LIVESTRONG brand" and stated that it "expected and planned for changes like this and are therefore in a good position to adjust swiftly and move forward with our patient-focused work." According to USA Today, the foundation will continue to produce the $1 yellow bracelets through a contractor in China after the 2013 holiday season. Even though they are being manufactured separately, the packages will still bear the Nike logo until that contact expires at the end of 2014.
Even if the product remains, will it retain the same promotional power as it did pre-scandal? "Without Lance, Livestrong would be just another cancer charity scrapping for funds," said Bill Gifford of Outside Magazine. The same argument can be made for the yellow bands: without Nike's support and marketing, are the bracelets just another product with a nonprofit logo?
"Silicone bracelets are far beyond Livestrong, and it will not affect them at all," Benn Chazan, account executive for BamBams, told Promo Marketing earlier this year when news broke of Armstrong's cheating. Several other awareness band suppliers agreed with Chazan and said sales for the popular promotion stayed constant or increased last year. Gel bracelets remain popular fundraising items for nonprofits like Susan G. Komen for the Cure and Alex's Lemonade Stand, and are still regularly sold as fashion accessories in retail stores.
While the use of awareness bracelets for fundraising and fashion is expected to remain popular, the future of Livestrong's yellow wristband is less certain. An article in The Atlantic Wire, Lance Armstrong Killed the Livestrong Bracelet, said "its product is damaged goods" and projects a significant drop in fundraising ability. The Associated Press reports that Livestrong has reduced its budget by 11 percent in anticipation of reduced fundraising ability, and an article on Yahoo asked, "Is the charity doomed?"
"Right now we're hoping for the best and expecting the worst," said Doug Ulman, CEO of Livestrong, in an interview with Fast Company. "There are still people who believe Nike owns and created the brand. That's a big problem. The brand outgrew the foundation message." Despite that, Ulman remained optimistic that people would see the good that Livestrong has done, and hoped other sponsors would soon join the foundation to support its staff and mission.
What do you think? Will the lack of support from Nike hurt the foundation's marketing and sales? Could it impact the impression end-users and end-buyers have of awareness bracelets as promotional products? Leave your thoughts in the comments below.