- Nike is reportedly closing nine of its wholesale accounts: City Blue, VIM, EbLens, Belk, Dillard's, Fred Meyer, Bob's Stores, Boscov's and Zappos, according to an analyst note from Susquehanna Financial Group. The analysts, led by Sam Poser, called the decision "positive for Nike, as it takes control of more of its own destiny." It was unclear when the athletics giant would step back from those wholesale accounts.
- "Nike has a bold vision to create the marketplace of the future, one closely aligned with what consumers want and need," a Nike spokesperson said in response to questions about the closures. "As part of our recently announced Consumer Direct Acceleration strategy, we are doubling down on our approach with Nike Digital and our owned stores, as well as a smaller number of strategic partners who share our vision to create a consistent, connected and modern shopping experience."
- Susquehanna Financial Group noted that the move was beneficial to other Nike wholesale partners with stores nearby to the closing wholesale accounts, especially Dick's Sporting Goods, Hibbett Sports and Shoe Carnival. It could also benefit Famous Footwear, DSW and Foot Locker.
Nike has been very clear about taking a harder look at the wholesale accounts it sells through, and prioritizing its own direct-to-consumer channels.
In November of last year, the retailer stepped back from Amazon, announcing the end of that partnership in favor of "strong, distinctive partnerships for Nike with other retailers and platforms." Wells Fargo analysts at the time commented that with the power of the Nike brand, the athletics giant didn't need to partner with anyone "just for the sake of distribution."
Since then, Nike has doubled down on its Nike Direct strategy, announcing in June an acceleration of certain key elements of the strategy. Most of the brand's moves are centered around enhancing its digital offering and paring down its wholesale partners in favor of DTC channels.
"Over the past few years, we have shifted from a legacy, wholesale distribution model to investment in a model that gives our consumers a more premium shopping experience," CEO John Donahoe said on a conference call at the time.
The closure of these wholesale accounts seems to fall in line with that strategy, and more may be coming down the line as the retailer evaluates its partnerships.
"Nike has the keys to most every large and small athletic retailers' success, and those keys are becoming more valuable," Susquehanna Financial Group analysts said in June in response to Nike's DTC strategy acceleration.
The retailer's goals for the future include more emphasis on its owned stores, including opening up to 200 new smaller format stores globally inspired by the Nike Live concept it's been testing, and working with "a small number of strategic partners." The shift isn't without its costs: The retailer expects layoffs as a result of the acceleration of its strategy, but any savings from those job losses will be "reinvested into our priorities," the company said at the time of the announcement.