Nike fired its distributors. Then it hired them back.
In 2017 Nike set out to go direct and exited about 50% of its retail partners. By September 2022 its inventory had ballooned 44%. Fiscal 2023 direct share: about 42%, against a 60% goal.
Transcript
Before you cut out your distributors, list the shocks they absorb for you. Nike found out what they were by losing them.
On June 15, 2017, Nike announced the Consumer Direct Offense, built to better serve the consumer personally, at scale. Sell directly, and you keep the wholesale discount, own the data and control the story.
By September 2021, Nike's CFO said it had exited about 50% of its retail partners, from Zappos to Dillard's, while keeping Foot Locker and Dick's.
Then the shock absorbers were gone. By September 2022, Nike's inventory had ballooned 44%, and it missed its revenue projection for the first time in two years.
The goal was 60% direct. Fiscal 2023 came in at roughly 42%: $21.3 billion of Nike's $51.2 billion in revenue.
So Nike went back. In the second quarter of fiscal 2025, Nike's North America wholesale grew 24% while direct fell 10%. In 2025, Nike products returned to Amazon, ending a six-year absence.
Going direct was not wrong in itself. The record shows the cost of cutting about half your partners. If you go direct, move channel by channel, and watch inventory as closely as margin.
The records behind this video
Every figure in the video comes from this Decision Record, each with its sources.
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