Nike 21-Month Chart as the Shoe Giant Contemplates Selling on Amazon
Investopedia — Sports retailers could be the next to feel the full force of Amazon.com Inc. A deal between Nike and Amazon that would allow the Oregon-based retailer to sell its shoes and clothing apparel on the e-commerce website could be around the corner, according to Goldman Sachs.
In a research note Wednesday, the U.S. investment bank said the two were working on a direct relationship, which would give Nike the opportunity to reach a wider audience, especially younger shoppers who prefer to shop online.” Taking this step would give NKE direct economic exposure to a large and fast growing distribution channel while improving the brand presentation and expanding access to Millennial shoppers,” the note said, according to the AP.
“NKE’s move could inspire other wholesale brands, many of which have so far resisted a partnership with amazon.com, to directly engage.”Amazon, which already sells Nike products through third-party sellers on its Marketplace platform as well as its subsidiary zappos.com would gain greater control on how Nike products are advertised.
Amazon, which already sells Nike products through third-party sellers on its Marketplace platform as well as its subsidiary zappos.com would gain greater control on how Nike products are advertised.
The news sent ripples through the sports retailers market with Dicks Sporting Goods, Footlocker and Hibbett Sports all falling by more than 5 percent. For Nike, the potential deal couldn’t come sooner as the company continues to struggle; sales in North-America have stagnated, and in June it was forced to cut 1400 jobs, or about 2 percent of its workforce, as it attempts to reach ambitious sales and revenue targets. Additionally, competitors Adidas and Under Armour already sell on Amazon.
The news comes just days after Amazon shook up the grocery market with its $13.7 billion acquisition of Whole Foods Market Inc and launched its own try-before-you-buy service called Amazon Wardrobe. This potential deal could be just another in a string of Amazon acquisitions.
“We expect Amazon to remain focused on the apparel category and see additional direct relationships with major brands only furthering its momentum in apparel as the category continues to move online,” the report said.
As shares in competitors fell, Nike shares rose by as much as 1.8 percent.
$NKE 21-Month Chart: