In anticipation of the holiday season, Nike is mending its relationships with retailers as the direct-to-consumer business model starts to falter.
The shoe and clothing company had been focusing on selling products directly to customers through its website, apps, and shops over the previous four years, cutting 50 per cent of its wholesale clients since 2018.
However, the Wall Street Journal noted that Nike has recently increased its collaborations with merchants, including Macy’s and DSW owner Designer Brands.
As part of its “newly elevated Nike relationship,” Designer Brands announced that it would start selling an expanded selection of athletic gear for men, women, and children in the fourth quarter.
Additionally, Macy’s said that after a break of about two years, Nike clothing and accessories would return to its department stores in October. Foot Locker, a retailer of trainers, also declared in March that it was “revitalising” its relationship with Nike and that their joint initiatives would begin to take shape during the forthcoming holiday season.
CFO Matt Friend said “wholesale partners” would play an “integral role,” “first, to authenticate our brands and then to create scale of distribution through a consistent consumer experience across a larger retail footprint.”
Nike’s direct marketing strategy has mainly been successful, boosting sales and enabling the business to surpass analyst projections for sales and profitability during the most recent quarter.
Between September and November 2022, Nike’s wholesale business expanded more quickly than its direct business, demonstrating that it is still essential to the company’s success. Adidas and Allbirds, among other companies, who are competitors of Nike, recently extended their wholesale agreements. As they pursue revenues, more and more DTC-native businesses have looked for retail partners.
