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How Nike became No. 1. And how it plans to stay there

Nike is the biggest sneaker maker in the U.S., putting it ahead of rivals Adidas and Under Armour. Its dominance in sports retail is undeniable. And it's also just an all-around beloved brand, among teens, adults and everyone in between.

But what comes with being the best in the business is the ever-present threat of losing that top spot. Nike still has its work cut out for it.

Nike shares, which have a market value of more than $130 billion, have rallied more than 15% this year and on April 18 hit an all-time high of 90%. As of Friday's close, the stock was trading around 85%. Nike's growth is better than the S&P 500 Retail ETF's (XRT's) gains of about 3% year to date. But Lululemon shares are up roughly 50% so far this year, while Under Armour shares have gained 48%.

For Nike, a recent sales slowdown in the U.S. could threaten its gains. It needs to keep investors believing its future success is multi-fold, and steps are being made to keep momentum alive.

The primary focus for Nike in 2019 is selling more directly to consumers. So it's been investing in e-commerce, building tech like a foot-scanning app that tells users their accurate sizes, opening more stores and trying to clean up third-party marketplaces including Amazon

How sneaker culture took over the world

Most sneakerheads credit the advent of their subculture to the rise of athlete-endorsed shoes in the late '70s and early '80s. Converse's Chuck Taylor All-Stars had dominated the basketball courts for decades—and brands like Puma and Adidas started to get in on the action.

Long worn for function rather than fashion, today sneakers are an entire culture—both a form of self-expression and a high art found in museum exhibits and designer auction houses where a single pair can fetch millions of dollars.

As Ben Affleck's star-studded film Air depicts, the emergence of sneaker culture can be traced to Nike's 1984 collaboration with basketball superstar Michael Jordan on their iconic Air Jordans. Here's the story of sneakers—and the sneakerheads who collect them.

Air Jordans and the rise of sneaker culture

As depicted in the new Ben Affleck film Air, here's how Michael Jordan and Nike's iconic Air Jordans transformed the sneakerhead subculture into a $79 billion industry. Sneakers have come a long way from when they were first invented in 1860s England for the upper-class playing croquet and tennis.

“What was happening in New York was an intertwining of basketball, hip-hop, and [break dancing],” says Elizabeth Semmelhack, director and senior curator of the Bata Shoe Museum in Toronto, which in 2013 became the first North American museum to devote an exhibit to the history of sneakers.

But what transformed sneaker culture into a true phenomenon was the 1985 release of Nike's Air Jordan 1s. In 1984, Michael Jordan was a talented rookie who had yet to play in a professional game. Despite that, Nike—better known then as a running shoe company saw Jordan as the future of their brand and signed him to a five-year, $2.5 million endorsement deal.

Debuting in bold hues of white, black, and red, Air Jordans were a defiant taunt to the NBA guidelines that required footwear to be 51 percent white. Sensing a marketing opportunity, Nike paid the $5,000 fine players received each time he stepped on the court wearing the shoes. The bet paid off: As Jordan proved to be one of the greatest basketball players of all time, the sneaker's popularity skyrocketed.