Nike is shutting out nine of its retail partners as the company continues a major focus and shift toward direct-to-consumer (DTC) sales, according to a note from Susquehanna Financial Group analyst Sam Poser.
The nine retailers are Belk, Dillard’s, Zappos, Boscov’s, Bob’s Stores, Fred Meyer, EBLens, VIM and City Blue, Poser reported. DTC in general has been exploding during COVID-19 as many brands, CPGs and retailers have been left high and dry by store closures and restrictions.
“Nike’s decision to no longer sell to nine multi-branded wholesale accounts is positive for Nike, as it takes control of more of its own destiny,” Poser said in the note.
A Nike spokesperson told the New York Post the company will continue to work with “a smaller number of strategic partners who share our vision to create a consistent, connected and modern shopping experience.”
Poser wrote that beneficiaries of the wholesale pullback include surviving partners Dick’s Sporting Goods, Hibbett Sports and Shoe Carnival, based on store locations, and to a lesser degree DSW, Foot Locker and Famous Brands.
Since 2017, Nike has been pursuing a major shift to DTC, seeing it as the future of retail. It has been more selective in its retail partnerships and investing heavily in digital effort and a new smaller store concept.
Last November, Nike made a splash by cutting ties with Amazon two years into a trial partnership, again to focus on “more direct, personal relationships,” the company said in a statement.
Nike’s partnership with Amazon surprised many in the industry in 2017, as the company had been highly successful through its ecommerce, wholesale and DTC channels, and there is always a concern about loss of brand control when dealing with the ecommerce giant. Major retailers that still sell through an Amazon partnership include Calvin Klein, J. Crew and Chico’s.