Why Nike, Adidas and Ralph Lauren products are getting harder and harder to find

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You probably have better luck these days catching them at their own stores or on their websites than at moms and smaller chains.

These and other major footwear and apparel brands are all reducing the number of outside retailers selling their products and focusing their efforts on getting customers to buy directly from their own channels as well as a select group of wholesale partners.

The change means shoppers will find fewer places to buy leading brands and also puts pressure on retailers who will no longer be able to stock highly sought-after shoes and clothes on their shelves, retail experts say. .

Selling directly to customers allows brands to make more money, control their prices, and present products exactly how they want them on their store displays. They can also prevent their labels from being over-discounted, which could weaken their brand image and pricing power.

“We’re less interested in small, undifferentiated players who don’t have particularly good service levels or in-store standards,” Crocodile (CROSS) CEO Andrew Rees said on a call with analysts in April.

By offering fewer wholesale products, brands can also strike a balance for their business: high demand and tight supply.

Strategies to break away from other retailers began long before the Covid-19 pandemic, of course, but have accelerated over the past two years.

“Even if the brands weren’t strongly focused on direct [sales] before Covid, now they are,” said Susan Anderson, analyst at B. Riley Securities.

In fact, brands have used the pandemic to accelerate their growth plans directly through their own channels, especially online. At the start of the pandemic, for example, stores were closed, with no choice but to push customers to buy online.
Once stores reopened and customers swooped in on new clothes, shoes and wardrobes, there was a huge mismatch between demand and supply. Brands had little to no additional merchandise to send to retailers, and they prioritized stocking up on their own stores and websites.
under protection (AU), Ralph Lauren (RL) and others, for example, have given up sending goods to discount stores like TJ Maxx – previously their options of last resort when they had excess inventory.

In addition to tightening up their wholesale partners and expanding online, many of these brands are opening new stores.

Some, like Under Armour, Adidas and Crocs sell to Amazon, but Canada Goose and Ralph Lauren have stayed away from the online giant. Some brands have been reluctant to sell on Amazon for fear of not having control over the customer experience.

Nike announced in 2019 that it would stop selling on Amazon.

Nike leaves DSW and Zappos

Among major sports brands, Nike was one of the first to signal that it would reduce the number of traditional retailers it sells to and focus on growing its direct-to-consumer business.

In 2017, Nike said it would focus its resources, marketing and best products on just 40 retail partners, including Foot locker (Florida) and Dick Sporting Goods (SDKs). At the time, Nike was selling to some 30,000 retailers.
Nike has since cut ties with many independent shoe stores and small chains, as well as bigger names such as Urban outfitters (URBN), Dillard’s (DDS) and Zappos, according to reports.
rivals like Adidas (ADDDF) and Under Armor have followed Nike’s lead by shrinking their own wholesale networks.

Nike is a draw and if stores don’t carry it, loyal Nike customers will shop elsewhere. (The company also owns the Jordan and Converse brands.)

Nike is also DSW’s largest sporting goods supplier, accounting for around 7% of the company’s sales in 2020. Last month, Designer brands (DBI), the parent company of DSW, said Nike has shipped the last of its products to the company. Once DSW sells them in stores and online, Nike will disappear from its shelves for good.

DSW believes it can replace Nike by increasing its sales of other sports brands, CEO Roger Rawlins said on a call with analysts last month. “We are achieving very good results across our sports portfolio,” he said.

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