24-hour match: 2x your gift’s impact today! Double my donation

As retailers suffer, Nike wants to just sell things itself

Aaron Schrank Jun 29, 2017
HTML EMBED:
COPY
Shoppers exit the Nike SoHo store in New York City. Drew Angerer/Getty Images

As retailers suffer, Nike wants to just sell things itself

Aaron Schrank Jun 29, 2017
Shoppers exit the Nike SoHo store in New York City. Drew Angerer/Getty Images
HTML EMBED:
COPY

Nike will report earnings after the markets close today. The athletic shoe and apparel giant is looking to reduce how much it relies on retailers and sell more products directly to consumers.

Retail bankruptcies and store closures have hurt Nike’s already-sluggish sales. Wedbush analyst Christopher Svezia said Nike wants fewer middlemen.

“It’s just a laundry list of retailers that are closing space,” Svezia said. “This is just Nike trying to control a little bit more of their own destiny.”

Nike is slashing 2 percent of its workforce and will focus on selling through its own website and Nike stores. Plus, Goldman Sachs reports Nike will soon sell directly on Amazon. Svezia said right now you can buy its products there, but not from Nike itself.

“You have third-party resellers selling a substantial amount of Nike product, with no pricing integrity,” Svezia said.

A pair of Nike VaporMax running shoes costs $190 in stores. Average price on Amazon? About $300. Andrew Burns, a research analyst at D.A. Davidson, said look at other active lifestyle brands, like Under Armour, Adidas and Lululemon. Most have direct-to-consumer strategies.

“And it’s one of the fastest-growing components of their business,” Burns said.

Who loses? Maybe Foot Locker, Finish Line and Dick’s Sporting Goods. They saw shares tumble on news that Nike wants to “just do it” itself. 

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.

Don’t miss this match!

Donate today and your gift will be matched dollar-for-dollar by the American Public Media Board.