Nike (NKE) Is 2016's Most Valuable Apparel Brand

Forbes recently announced its annual list of the world’s most valuable brands. Every year, it ranks the top 100 companies across the auto, luxury, media, and retail industries. The top spots are usually dominated by tech companies, and this year is no different. Apple Inc. (NASDAQ:AAPL) , Google, a division of Alphabet Inc. (NASDAQ:GOOGL) , Microsoft Corp. (NASDAQ:MSFT) , Coca-Cola (NYSE:KO) , and Facebook Inc. (NASDAQ:FB) take the top five spots.

What’s most interesting this year is not the tech companies, but rather one specific retail company’s rise: Nike Inc. (NYSE:NKE) . The sportswear company came in at number 18, overtaking luxury giant Louis Vuitton. Nike’s valuation of $27.5 billion, determined from its revenue before interest and taxes, was enough to help it maintain the same ranking it earned in 2015; Louis Vuitton dropped to number 19, making Nike the most valuable clothing brand.

Nike’s defeat of Louis Vuitton is important because it signals a shift in consumers’ fashion and lifestyle preferences: athleisure has officially taken over. According to InStyle, athleisure, or sometimes known as luxe leisure, is a broad category in the fashion that encapsulates everything from designer leggings from Lululemon (NASDAQ:LULU) to cashmere sweatshirts to loungewear made for home and the office.

Now, consumers would rather spend money on new Nike apparel rather than a Louis Vuitton handbag. And really, consumers are more willing to shell out major cash on designer items that fall under this trend. Luxury brands like Chanel, Tory Burch, Mara Hoffman, Cynthia Rowley, and Derek Lam, among many others, have all smartly created their own athleisure lines.

According to Business of Fashion, the luxury market’s growth has slowed 1% this year, and the industry is expecting to hit a new low point in 2016, despite some brands’ efforts This, in addition to millennials’ shopping influence—the group propelled athleisure into mainstream consciousness, and therefore embedded the trend into pop culture—is why it’s understandable that Nike was able to surpass Louis Vuitton

Nike’s command of the athleisure trend has helped boost the popularity of its already well-known Swoosh logo. The logo has always meant something special to the athletic community, but now it means that, when outfitted in it, you are both cool and fashionable. It will be interesting to see how much more athleisure will affect the way we dress on a daily basis, and it wouldn’t come as a surprise if Nike competitors like Adidas (OTC:ADDYY) and Under Armour (NYSE:UA) also see a boost in sales.