In a surprising reversal of its direct-to-consumer (DTC) focus, Nike will re-enter into a partnership to sell footwear at DSW stores. The footwear retailer’s parent company, Designer Brands Inc., announced the news last week in a call with analysts discussing first quarter earnings results. The deal will bring a variety of men’s, women’s and kids athletic footwear products to DSW and will kick off in October. Nike has slowly begun re-entering these wholesale relationships as it manages inventory excesses and looks to expand its reach beyond its owned channels.
Total Retail’s Take: Nike is pulling back on its plan to cut ties with wholesale partners, including DSW, Macy’s, and Foot Locker, in favor of growing its DTC business. A balanced mix of wholesale and DTC exposure appears to be the immediate path forward for Nike, as it re-establishes wholesale relationships with the above mentioned retailers. In an ideal state for Nike, the sportswear brand would be generating the large majority of its sales through its owned stores (physical and digital), leading to higher margins and control of the brand experience — and the capture of valuable first-party data. Yet the transition from wholesaler to DTC brand appears to have been too abrupt. Getting that mix right will be important to Nike’s future.
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