Why Nike's decision to cut ties with 9 major wholesalers is 'a positive': analyst
NKE) decision to no longer sell to 9 multi-branded wholesale accounts is positive for Nike, as it “takes control of more of its own destiny,” wrote analyst Sam Poser in a note to clients. Poser has a Positive rating and a $150 price target on the stock.
According to SIG research, the Swoosh brand is closing wholesale accounts with the following retailers:
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City Blue, a 20-store athletic fashion chain, with stores in PA, NJ, OH, and DE
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VIM, a 31-store athletic fashion chain, with stores in NY and NJ
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EbLens, a 48-store athletic fashion chain, with stores in NY, CT, MA, and NH.
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Belk, a ~300 store chain, with stores in TX, OK, MO, AR, LA, MS, TN, KY, AL, GA, FL, SC, NC, VA, WV, and MD
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Dillard’s, a ~285 stores in 29 states.
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Fred Meyer: ~130 store chain, with stores in OR, WA, ID, and AK.
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Bob’s Stores, a 30-store chains, with stores in NY, CT, MA, NJ, and NH.
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Boscov’s, a ~50-store chain, with stores in PA, NY, NJ, DE, MD, OH, CT, and RI
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Zappos.com, the online shoe retailer
DKS), Hibbett Sports (HIBB) and Shoe Carnival (SCVL) will be the greatest beneficiaries of Nike’s decision. SIG also believes that Famous Footwear, DSW and potential Foot Locker (FL) could see some benefits from the move as well.
Nike tells Yahoo Finance the move is part of the company’s expanding “Consumer Direct Offense,” a strategy that has been paying off for the brand as of late. Direct-to-consumer (DTC) growth accounted for 33% of the Swoosh brand’s revenue in FY20, up 3% from FY19.
Nike’s direct-to-consumer offense is ‘on steroids:’ Analyst]
When Yahoo Finance reached out to Nike for comment regarding the analysts’ findings, Nike said, “Nike has a bold vision to create the marketplace of the future, one closely aligned with what consumers want and need. As part of our recently announced Consumer Direct Acceleration strategy, 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.”
@ReggieWade.” data-reactid=”44″>Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade.
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