Nike is reportedly cutting ties with six more key retailers, according to Williams Trading analyst Sam Poser. In August, Nike announced it was closing accounts at Fred Meyer, Zappos, Dillard’s, City Blue, VIM, EbLens, Belk, Bob’s Stores and Boscov’s. While those partners were not insignificant, today’s list includes DSW, Urban Outfitters, Macy's, Shoe Show, Dunham’s Sports, Olympia Sports, and Big 5 Sporting Goods. Nike is not alone in looking to exit partnerships with traditional brick-and-mortar retailers. Under Armour is looking to leave thousands of wholesale doors, while Adidas is planning to have 50 percent of its sales direct to consumer (D-to-C) by 2025.
Total Retail's Take: This is the latest push by Nike to grow its D-to-C business, which offers the company greater brand control and, of course, higher margins. Consider that by 2011 Nike's D-to-C channel’s revenue was just shy of $3 billion, accounting for 16 percent of its gross sales. By the end of fiscal 2020, that number more than doubled to 35 percent, with D-to-C sales growing to $12.4 billion. Nike intends to grow its D-to-C sales through its digital properties as well as its immersive, experience-filled retail locations. The greater concern in this story is the impact this decision will have on retailers such as Macy's, which rely on leading brands such as Nike to generate consumer attention and purchasing. With more leading brands such as Nike opting to go the D-to-C route, where does that leave the multibrand department store and specialty retailer? In a challenged position, to say the least.