Nike has more than signaled its direct-to-consumer (DTC) intentions, and its ambitions in this area have led the brand to cut ties with several retailers who previously carried its products. DTC has the advantages of offering higher margins and allowing companies like Nike to protect their brands and messages. And the alternative to wholesale is looking more and more attractive to brands like Nike as department store chains flounder and sometimes sink. Most recently, Nike has reportedly cut ties with six more retailers, including Urban Outfitters and Olympia Sports, with rumors that Macy's is also on the chopping block.
Nike is not alone in the “exit plan.” Under Armour is also looking to leave thousands of wholesale doors, while Adidas is planning to have 50% of their sales direct-to-consumer by 2025.