In a stunning move, Nike decides to drop its merchandise out of many retail stores. Nike wants to go direct to consumer. The reason, better profit margins than they would sell to wholesalers. The Nike brand is also concerned about how its products are displayed and it seeks more control over its own merchandise and marketing.
They will continue to offer customers merchandise to purchase in their brick-and-mortar stores and in their online marketplace. They will also drop all most third-party relationships with online venues as well such as retailers like Footlocker. Footlocker, which is the largest vender for Nike has announced that it will take a deep dive in profits due to Nike’s decision to take the merchandise out of the stores. This will also be a big blow to other large retailers that carry the Nike brand, and it is likely profits will plummet for those businesses as well.
Other large brands like Adidas and Under Armour are also pulling back from third party resellers so they can furthermore protect their brand and increase profit margins.
(Photo:Robert Way)
