Nike Inc. stood by its decision to pull its Fourth of July sneakers from stores, even as the move drew criticism from conservative officeholders who say political correctness has gone too far.
"We regularly make business decisions to withdraw initiatives, products and services. Nike made the decision to halt distribution of the Air Max 1 Quick Strike Fourth of July based on concerns that it could unintentionally offend and detract from the nation's patriotic holiday," the company said in an emailed statement Tuesday.
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The Air Max 1 USA was intended as a celebration of Independence Day, with a flag that featured 13 white stars in a circle on the heel. The flag was created by Betsy Ross, an upholsterer in Philadelphia who has been credited with sewing the first stars-and-stripes flag in 1776, during the Revolutionary War.
To many, the flag is merely a relic, a symbol of America's history. The design recently has taken on another meaning for some Americans, as far-right groups have claimed it as a symbol of their cause. It has also been criticized as evocative of an era when slavery was still predominant in the U.S.
The Wall Street Journal reported that former NFL quarterback Colin Kaepernick, who has a major endorsement deal with Nike, told the company that he and others found the flag symbol offensive.
Arizona Gov. Doug Ducey, a Republican, tweeted that he was "embarrassed" for Nike and said he had "ordered the Arizona Commerce Authority to withdraw all financial incentive dollars" that the state was planning to offer the company to open a $185 million manufacturing plant near Phoenix. And Sen. Ted Cruz, R-Texas, tweeted that it's a good thing Nike "only wants to sell sneakers to people who hate the American flag."
Nike has been planning to build a plant in the Phoenix suburb of Goodyear, a facility that would employ more than 500 workers within five years of opening, the Arizona Republic reported Monday. Nike said in the emailed statement that it was still committed to building a manufacturing center that will create 500 jobs, though it didn't specifically name Goodyear.
The Beaverton, Ore., company is set to lose a grant of as much as $1 million, previously awarded through the Arizona Commerce Authority's Arizona Competes Fund. The grants, which are discretionary, are given to projects that help the local economy and provide high-wage jobs, according to the authority.
Nike, with annual revenue that tops $39 billion, reported last week that sales rose 4%, to $10.2 billion, for the quarter that ended in May.
Kaepernick, who endorses Nike products, contacted the company after the Fourth of July shoes were posted online.
The former San Francisco 49ers quarterback hasn't played since 2016, when he began kneeling during the national anthem to protest racial inequality. Last year, Nike made Kaepernick the face of an advertising campaign while he was engaged in a dispute with the league.
The anger about Nike's decision mirrors the vocal response from some Nike consumers in September when the company featured Kaepernick in an ad with the slogan, "Believe in something. Even if it means sacrificing everything." Boycott calls and anger on social media led to a brief dip for the company's stock, which later rebounded. Chief Executive Officer Mark Parker touted the traffic and engagement generated by that polarizing ad.
This isn't the first time Nike has pulled a controversial product. Just last week, the company withdrew from China a line of limited-edition shoes after the Japanese designer behind them posted in support of the Hong Kong protests against a proposed extradition bill.
As the controversy over the Fourth of July shoes swirled, prices for the Air Max 1 USA spiked to $2,500 a pair -- about 20 times higher than the retail price -- on sneaker marketplace StockX, where buyers place bids and sellers set asking prices anonymously.
StockX CEO Scott Cutler said in a Twitter post Tuesday afternoon that the company had decided to remove the listings.
Nike's shares closed Tuesday with a loss of about 0.5%.
Information for this article was contributed by Eben Novy-Williams and Craig Giammona of Bloomberg News; by Sandra E. Garcia and Niraj Chokshi of The New York Times; and by Jonathan J. Cooper of The Associated Press.
Business on 07/03/2019