Nike to stop selling sneakers in one of America’s biggest shoe chains

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Nike has announced that it will stop selling to DSW as it cuts ties with many stores and switches to selling more of its products through its own stores, websites, mobile apps and select retailers.

The company has significantly reduced the number of traditional retailers it sells to in recent years to improve its profits and strengthen control over how its products are presented. This has hurt some independent sneaker and sports stores, which rely heavily on sales from Nike – the world’s largest shoe maker – to attract customers.

Designer brands (DBI), the parent company of DSW, said on a earnings conference call Tuesday that Nike shipped the last of its products to the company in September. Once DSW sells them in stores and online, Nike will be gone from the shelves.

Nike is DSW’s largest sporting goods supplier, accounting for approximately 7% of DSW’s sales in 2020.

Nike (NKE) CFO Matthew Friend said in September that the brand had “exited about 50%” of its retail partners since the strategy was announced in 2017. At that time, the company had said it would focus its resources, marketing and best products on just 40 retail partners. , including Walk-in locker (Florida) and Dick’s Sporting Goods (DKS).

Selling products through its own website and physical stores earns Nike more than double the profit it would make from selling through wholesale partners. The company is also gaining much tighter control over customer experience and pricing. This is a big advantage for a high-end brand like Nike that wants to present its products to customers in an attractive and consistent way, and avoid the products being subject to excessive discounts.

Rivals Under protection (TO) and Adidas (ADDDF) are following Nike’s lead, removing their retail partners and creating the direct-to-consumer channel.

Meanwhile, despite the loss of Nike, DSW believes it can increase its revenue by developing other sports brands.

“We are doing very well across our entire sports portfolio,” Designer Brands CEO Roger Rawlins said on Tuesday in a conference call with an analyst.

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