Nike has announced plans to sever ties with a further seven major retailers including Urban Outfitters and Macy’s as it continues its relentless shift towards direct-to-consumer sales.
The sportswear giant has announced that its goods will no longer be stocked in Urban Outfitters, DSW, Shoe Show, Dunham’s Sports, Olympia Sports, Big 5 Sporting Goods and Macy’s marking its biggest manoeuvre yet away from a third-party sales model.
Nike’s dramatic rejection of these major brands comes as it seeks to capitalise on direct-to-consumer, first party sales giving it a much larger slice of the profits made on every item.
The shift away from the traditional third-party sales model, which has seen retailers drive prices of its goods as low as possible to compete with the growing dominance of online retail, has been in the works for some time.
In August last year, Nike revealed that it was cutting ties with nine major wholesalers in a bold move which would see its products no longer stocked in over 1000 stores.
Nike abruptly stopped 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.
Both moves form part of Nike’s wider Consumer Direct Acceleration strategy, which will also see it roll out around 200 small-format Nike Live stores to ensure it is still largely represented physically on the high street.
Nike is not the only major brand adopting this strategy, with its key rival Adidas announcing a similar move earlier this month.
The German sportswear giant unveiled a five-year plan promising to double payouts to shareholders and drive revenues to more than €30 billion (£25.6 billion) over the next four years.
To achieve this Adidas plans to dramatically increase the amount of sales made directly to consumers through its own stores and ecommerce platforms.
Adidas says it expects a whopping 80 per cent of its growth to come from direct-to-consumer sales, driven primarily by a significant digital expansion.