Nike cutting ties with several retailers

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Super S
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Nike cutting ties with several retailers

Post by Super S »

Nike is cutting ties with several retailers:

https://www.businessinsider.in/retail/n ... 743985.cms

Among those retailers is Fred Meyer, where apparel is already struggling as they seem more focused on grocery. Fred Meyer is interesting because they have carried Nike products for many years and, like Nike, is based in the Portland area.

I have never done business with any of the other retailers mentioned, so can't comment on what effect this will have on them.
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Re: Nike cutting ties with several retailers

Post by TW-Upstate NY »

I remember back in the early '80's buying a pair of Nike "waffle trainers" in K-Mart of all places so back in the day they cast a pretty wide net. Made in USA if you can believe it and they wore like iron.
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Re: Nike cutting ties with several retailers

Post by buckguy »

They're shoes really ran down hill 80s/90sish. They also made the mistake once of disclosing the trivial amount of cost savings they had offshoring production.
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Re: Nike cutting ties with several retailers

Post by SamSpade »

It appears based on the list that they are cutting ties with any regional retailers or those that do not move a lot of athletic footwear. It is unclear to me if this also means no more apparel in these stores.

I wonder what that will mean for the Fred Meyer adjacent to Nike headquarters that has a special 'athletic' apparel and footwear department with its own displays, register, etc.
In a post Monday, analyst Chris Burns, who's written two books about the disruption of sneaker retail, said losing Nike accounts is a challenge for stores that sell sportswear because of the company's large market share. Burns said stores that lose Nike accounts need to "rethink the design of stores" in order to elevate remaining brands.

Poser said Nike also is closing the accounts of the department stores Dillards and Belk and several athletic fashion chains, including City Blue, VIM and EbLens.
At an investor day in 2017, Nike said it would drastically reduce its number of wholesale partners, as part of a business strategy called the Consumer Direct Offense, which sought to increase sales and get products to consumers quicker.

To date, many of the accounts Nike has closed have been smaller, specialty stores, not large chains.
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Re: Nike cutting ties with several retailers

Post by klkla »

There is a lot to risk to this strategy.

"In response to the report, Nike said in part, "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."

Basically they are trying to keep more of the profit on sales of their products and put the squeeze on retailers. That can work when you are looking to keep your existing customer base but will backfire with attracting new customers to the brand. The stores that Nike is cutting out will still sell shoes but now their customers will buy Adidas, Puma, New Balance and all the rest and a lot of customers that always bought Nike in the past will try these different brands and likely find out they're just as good or even better in quality.
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Re: Nike cutting ties with several retailers

Post by Super S »

SamSpade wrote: August 25th, 2020, 1:54 pm
I wonder what that will mean for the Fred Meyer adjacent to Nike headquarters that has a special 'athletic' apparel and footwear department with its own displays, register, etc.
For what it's worth, several Fred Meyer stores around the Portland area, including more recent ones such as Wood Village, once had such departments with brand-name athletic apparel. Some did not have dedicated registers. Not just Nike, but also Speedo, Under Armor, etc. As time has gone on, some of these departments have been removed during remodels and converted into general space. Some of those departments have just been integrated into the regular clothing departments.

With Fred Meyer adding the Dip line, and also doing things like locking up certain clothing items due to theft, they seem to be de-emphasizing and/or removing many brand names, so perhaps Nike is no longer a good fit with this strategy. Nike just might be one of the more high profile brands taking note of their struggling apparel operations.
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Re: Nike cutting ties with several retailers

Post by storewanderer »

Super S wrote: August 25th, 2020, 7:43 pm
SamSpade wrote: August 25th, 2020, 1:54 pm
I wonder what that will mean for the Fred Meyer adjacent to Nike headquarters that has a special 'athletic' apparel and footwear department with its own displays, register, etc.
For what it's worth, several Fred Meyer stores around the Portland area, including more recent ones such as Wood Village, once had such departments with brand-name athletic apparel. Some did not have dedicated registers. Not just Nike, but also Speedo, Under Armor, etc. As time has gone on, some of these departments have been removed during remodels and converted into general space. Some of those departments have just been integrated into the regular clothing departments.

With Fred Meyer adding the Dip line, and also doing things like locking up certain clothing items due to theft, they seem to be de-emphasizing and/or removing many brand names, so perhaps Nike is no longer a good fit with this strategy. Nike just might be one of the more high profile brands taking note of their struggling apparel operations.
Given Nike HQ is in Fred Meyer's backyard I do find it somewhat odd they will no longer sell the Nike products at Fred Meyer. I wonder if this was a mutual decision or if Nike pushed this.

Shopko carried Nike as well.

This is the end for Nike in the discount format stores.

I wonder if Nike would go into Target...
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Re: Nike cutting ties with several retailers

Post by buckguy »

What's more interesting is that they are cutting ties with other chains, like Boscov's, which runs old fashioned sounding stores in the East and Dillard's which skews toward an older clientele. I wonder if part of the strategy to focus on specific demographics. They may simply be dropping low volume or declining accounts with an eye toward cutting their sales rep staff, as part of the shift to digital and their own stores. They don't seem to be dropping DSW which sells most of their line---the perennially popular stuff, not the "high fashion" stuff that sells at a premium, so they want a channel for the cash cows, just not Fred Meyer. And I assume they're keeping Nordstrom which is the one traditional department store with a big shoe department (their original business).
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Re: Nike cutting ties with several retailers

Post by storewanderer »

buckguy wrote: August 26th, 2020, 5:17 am What's more interesting is that they are cutting ties with other chains, like Boscov's, which runs old fashioned sounding stores in the East and Dillard's which skews toward an older clientele. I wonder if part of the strategy to focus on specific demographics. They may simply be dropping low volume or declining accounts with an eye toward cutting their sales rep staff, as part of the shift to digital and their own stores. They don't seem to be dropping DSW which sells most of their line---the perennially popular stuff, not the "high fashion" stuff that sells at a premium, so they want a channel for the cash cows, just not Fred Meyer. And I assume they're keeping Nordstrom which is the one traditional department store with a big shoe department (their original business).
Dillard's had some of the deepest discounts on a very limited stock of Nike products that I have ever seen when the items got clearanced. I was actually curious how they were allowed to go so low as typically I do not see Nike go more than about 40% off and even that is not so common.

Discontinuing from Dillard's and Boscov's- there are a lot of other stores in those malls or near those locations that sell Nike. I think exiting may make some sense. Those are not athletic shoe focused retailers.

Fred Meyer I still struggle a little with why they are exiting. There are some smaller/medium markets there that do not have a lot of other stores selling Nike products, if any.

Nike is largely gone from Nordstrom in-store but still has some decent mix online. For in store, literally 7 women's and 5 men's Nike Shoe SKUs available for pick up at Roseville, CA and a couple bay area stores I looked at.
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