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Nike will no longer be selling its sneakers and apparel at Designer Show Warehouse, one of the largest shoe store chains in the U.S. By 2022, Nike branded products will not be in any DSW stores anymore.
The American footwear and sports apparel manufacturer has cut ties with a number of stores and DSW is included in the list. The move is part of Nike's strategy to boost sales by selling more of its products through its own brick-and-mortar shops, online stores, select retailers, and the Nike app.
As per CNN Business, Nike has cut off many traditional retailers and tightened its control on how its products are presented. Its decision to stop selling its sneakers and apparel may benefit the company but it hurt some of the independent shoes and athletic shops - especially those that heavily rely on earning profits from the sale of Nike items.
Early this week, DSW's parent company, Designer Brands Inc., stated during the earnings call that Nike had already shipped out the last batch of its products to the company in September. Apparently, once these items are sold, there will be no more shipments to look forward to and the brand is permanently gone from its store shelves.
It is easy to see why DSW will be hit hard by Nike's decision to pull out. The brand is DSW's largest supplier of athletic merchandise and accounted for around seven percent of DSW's 2020 sales results.
In September, Matthew Friend, Nike's finance chief, said that they have withdrawn from 50% of its total retail partners since 2017. He said they will only retain 40 retail partners including Dick's Sporting Goods and Foot Locker.
Nike is hoping it will earn bigger profits, perhaps double the amount, as it starts selling its goods on its own physical stores and online shop. The company will also be able to control the pricing of its products in this way so it has more opportunities to earn more.
At any rate, while they may be affected, DSW still believes it can recover and make up the revenue it will lose by boosting other top brands that it sells. WRCB-TV News quoted Roger Rawlins, Designer Brands chief executive officer, as saying during an analyst call this week, "We are getting strong results really across our entire athletic portfolio."
