Nike Inc. to Sell Directly to Amazon

By Prinitha Govender | 23 Jun 2017

Nike Inc. has agreed to sell some of its products directly to Amazon, a concession by the sneaker brand to reduce the number of counterfeit Nike products sold on Amazon, and one that shows it can no longer afford to ignore the online retail giant.

Nike will soon begin selling its merchandise on Amazon through its brand-registry program, according to Bloomberg sources, which is part of its strategy recently announced to boost direct-to-consumer online sales. Just last week, the sportswear brand announced it will be axing 1,400 jobs to increase its D2C focus.

The latest news of its Amazon partnership is a blow to retailers that stock it, including Rebel Sport, The Athletes Foot, Foot Locker and department chains as well.

The partnership would benefit Nike in several ways though. The plan is primarily part of Nike’s strategy to reduce the number of counterfeit Nike shoes being sold on Amazon’s marketplaces.

Shoes are easy targets for counterfeiters, and Nike’s global popularity makes it an especially appealing target, which has put pressure on the brand to police its online sales more aggressively.

Also, rival Under Armour is already selling on Amazon (also) amidst pressure to boost its e-commerce sales.

For Amazon, the deal means a sizeable new source of revenue in the footwear and apparel market, both important segments which will assist Amazon’s broader push in the fashion and clothing sector.

It’s unclear how much of Nike’s merchandise will flow through the Amazon channel, but the news of the special relationship between the two saw shoe retailers share price tumbling. On Thursday, shares in RCG Group and Super Retail Group plummeted 4.5% after Nike agreeing to sell on Amazon, following years of refusing to do so.

In the US, share value of Foot Locker declined 11%, while European retailers JD Sports Fashion Plc and Sports Direct International saw reductions well. Nike, meanwhile saw an upturn of as much as 1.8% on Wednesday, while Amazon gained as much as 0.6% share value.

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