Nike Renewing Relationships With Retailers in Shift From D2C Focus

Nike products will again be available at Designer Shoe Warehouse.

The brand had stopped selling its products to the retailer as it focused on its own direct-to-consumer (D2C) efforts, but Designer Brands CEO Doug Howe announced during a Thursday (June 8) earnings call that the two companies are partnering again, and the products will be available to consumers in November.

“We’ve had ongoing dialogue for the past several months and we’re super excited to be able to bring that back across men’s, women’s and kids’. That will happen in Q4,” Howe said during the call.

Nike had ended a partnership with Designer Shoe Warehouse in 2021 after announcing a change in strategy in 2017 in which it cut ties with many retailers — about half of those with which it had been dealing — and began focusing on D2C, ModernRetail reported Friday (June 9).

However, last week, Nike renewed a partnership with Macy’s — a retailer that, like Designer Shoe Warehouse, the brand had dropped in 2021 but is now partnering with again beginning in the fall, according to the report.

Nike is also renewing its relationship with Foot Locker, the report said.

While Nike’s D2C business has grown, the brand lost some customers in its shift away from retailer partnerships, allowed rival brands to gain more prominence, reduced the ability of shoppers to compare its products to those of other brands, and found that its inventory was building up, per the report.

Nike had moved to a cross-channel sales strategy that coupled D2C sales with in-store sales after its stock dropped by half over 2021 and 2022.

Focusing on its D2C and marketplace rollouts, the brand continued to push its plans for digital innovation, distribution changes and new retail concepts. By December 2022, its digital business had grown 34% over the second quarter of 2022.

However, at the same time, pandemic-era supply chain challenges resulted in Nike having a surplus of inventory over the past few quarters.

Subsequently, the company relied on its wholesale partners to sell off its inventory. In the quarter ended Nov. 30, 2022, Nike’s wholesale revenue increased by 19% after being stagnant for several quarters.

“Our strategic wholesale partners, partners like Dick’s Sporting Goods or Foot Locker or JD, are very, very important because consumers want to be able to try on products, they want to be able to touch and feel,” Nike President and CEO John Donahoe told CNBC. “And so, we’ve invested in strengthening those strategic relationships.”