According to reports today, Nike and Amazon are close to officially announcing a partnership that will allow the sports apparel brand to sell its product directly through the online marketplace. In addition to consumer business, Nike would also take greater control over the increasing amount of counterfeit merchandise currently being sold on the platform.
Immediately, retailers such as Foot Locker, Finish Line and Dick’s Sporting Goods saw their stocks tumble, closing between 4 and 5 percent lower. However, according to the New York Post, industry experts warn that a selloff of shares for those retailers would be premature, because Nike would not offer premium product, such as Air Jordans, through Amazon. Instead, it's believed that department store retailers, like Kohl's and Famous Footwear, will be the ones to feel long-term effects.
Chris McCabe, an e-commerce consultant and former Amazon executive, believes a deal could also hurt business for Amazon's third-party vendors.
“Sellers may find themselves feeling like they have targets on their backs, stuck with inventory they can’t sell on Amazon and possibly suspended for bad Nike products,” he told the Post.
Nike currently sells sneakers and apparel through Amazon subsidiary Zappos. Following the news on Wednesday, the stocks of both Nike and Amazon increased.