Nike to Stop Selling Directly to Amazon

By Khadeeja Safdar 

Nike Inc. said it would stop selling its clothes and sneakers directly to Amazon.com Inc., an about-face for the sportswear brand.

The sneaker giant agreed in 2017 to sell products to Amazon in exchange for stricter policing of counterfeits and restrictions on unsanctioned sales. It was part of Amazon's effort to court big fashion brands to sell their products through its website.

In a statement Tuesday, Nike said it has decided to focus on its direct business, though it will continue to seek partnerships with other retailers and platforms. Nike's move was earlier reported by Bloomberg News.

For years, Nike had refused to sell directly to Amazon, fearing it would undermine its brand. Nike executives were unhappy with how unauthorized sellers continued to be widely available on Amazon, according to people familiar with the matter.

An Amazon representative had no immediate comment Tuesday.

Nike has focused on bulking up sales via its own stores, its apps and its own website. It has pared back the number of retailers it uses and now gets more than 30% of its annual sales from its direct-to-consumer business.

At the same time, Amazon's website has come under greater scrutiny as the volume of products sold by third-party sellers has exploded. They accounted for 60% of physical merchandise sales on the site in 2018, up from 30% a decade ago. Amazon has made the process to list products so simple that counterfeiters have been exploiting the marketplace, The Wall Street Journal has reported.

Amazon has said it prohibits the sale of counterfeits. Earlier this year, Amazon started letting brand owners delete listings on its site for products they deem fake. At the time, Amazon said its engineers were working to better train the algorithms that automatically scan, block and scrub the site of suspect listings.

--Dana Mattioli contributed to this article.

Write to Khadeeja Safdar at [e-mail]

(END) Dow Jones Newswires

November 12, 2019 22:42 ET (03:42 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.