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Foot Locker x Washington Heights Community Store

Source: aqua / aqua

For weeks now there’s been talk that Nike will eventually cut ties with Foot Locker and other stores and websites in order to sell their own products and get 100% of the revenue it garners.

Not too long ago Nike sent letters to smaller mom and pop shops informing them that they’d no longer be getting product from Nike as they weren’t moving enough merchandise to justify continuing business with them, but now Nike plans on pulling it’s brand from the big boy franchises including Foot Locker, Foot Action and Shoe Palace. With word that Nike will be opening up more brick and mortar stores across the globe and making the SNKRS app more “fair,” they’ll need all the product they have in order to make both plans a huge success.

At the same time that means that stores like Foot Locker and Footaction will suffer immensely as Forbes reports that Nike and Jordan brand products accounted for a majority of their sale receipts.

“Some 70% of Foot Locker’s sales in 2021 were in Nike product, the retailer said in its 2021 public filings, and it is now saying no single vendor will account for more than 55% of its merchandise selection. For this fiscal year it will be about 60% of its merchandise purchases, the company said. Its stock had immediately took a 30% dive last week following the news and while it recovered some of that as the new week began Foot Locker shares are still off about a quarter since the start of the year and, at a $31.62 close on Monday, less than half of their 52-week high set last May.”

And it’s only going to continue to dip as much as 8% to 10% as Foot Locker said it expects to expand offerings from other brands like Adidas, Puma, New Balance and Crocs (really?). Still, having Nike product pulled from it’s physical and digital shelves will definitely hurt the enterprise as we all know that Nike still runs these streets.

What’s worse is that if Nike’s move proves to be an immensely profitable one, how long before Adidas, Puma, and yes, Crocs follow suit? At the end of the day it’s all about the money and if cutting the middle man out helps the brand turn historic profits, who wouldn’t copycat the move? Will Foot Locker even be in business in 10 years?

Guess we’ll have to wait and see how this pans out.