Nike has cut ties with nine major wholesalers in a bold move which will see its products no longer stocked in over 1000 stores.
As part of its relentless shift towards a digital direct-to-consumer model, Nike will reportedly stop selling its products to a host of “strategic partners” including Zappos, Belk, Dillards, Boscov’s, Bob’s Stores, Fred Meyer, EBLens, VIM, and City Blue.
Collectively this means that its products will no longer appear in over 1000 stores, marking a major step in its “Consumer Direct Offense” strategy, aimed at driving customers to its own websites.
According to Susquehanna International Group (SIG) analyst Sam Poser, this is great news for the sportswear giant as it “takes control of more of its own destiny”.
It is also expected to be great news for retailers like Dick’s Sporting Goods, Shoe Carnival and Footlocker which are expected to continue receiving Nike stock.
In June Nike said its continued investment in digital services saw online sales rise to 30 per cent of its total revenue for the first time during its fourth quarter.
New membership registrations for its apps more than doubled during the quarter to 25 million, and its chief executive John Donahoe said Nike’s digital revenues will reach 50 per cent of all sales “in the foreseeable future”.
Donahoe, a former Ebay executive who took the role of chief executive in January, has put digital direct-to-consumer sales at the forefront of Nike’s strategy since joining, moving the company away from its largely wholesale focused model.
It had formerly pledged to double direct-to-consumer sales to $16 billion by the end of this year, however at the end of the current financial year they stand at $12.4 billion.