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Sports Retail Shaken Up Amid Word Nike Could Sell Direct On Amazon

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Sports Retail Shaken Up Amid Word Nike Could Sell Direct On Amazon
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Sports retailers were moving Wednesday morning following channel checks from Goldman Sachs analyst Lindsay Drucker Mann that suggest Nike Inc (NYSE: NKE) could begin selling directly through Amazon.com, Inc. (NASDAQ: AMZN).

NPD Group analyst Matt Powell also tweeted about the potential move.

What Nike Could Win

The athletic apparel giant already has a presence on Amazon-subsidiary Zappos, but sells only through unlicensed, third-party resellers on Amazon itself.

Nike could see a 100 basis points rise in global sales by selling direct on Amazon, according to Mann, amounting to $0.6-1 billion in retail sales.

This growth would be driven by increased control over how it appears on the site, citing Under Armour Inc (NYSE: UAA)’s business on Amazon as a baseline.

Under Armour already sells directly under it’s own, customized page on Amazon. It also has licensed third-party sellers on Amazon Marketplace. This setup allows Under Armour’s newest styles to appear sooner than Nike’s and encourages more customer reviews.

A cleaner, less fragmented landing page for consumers on Amazon would also appeal to millennials who prefer shopping online.

The Movers

The following retailers were moving in Wednesday’s pre-market session on the speculation:

  • Foot Locker, Inc. (NYSE: FL) down 6 percent.
  • Dicks Sporting Goods Inc (NYSE: DKS) down 5.9 percent.
  • Finish Line Inc (NASDAQ: FINL) down 4.8 percent.

Nike shares also rose as much as 1.9 percent on the report.

Related Links:

Previewing Nike's Q4 Earnings: 3 Recent Developments Increase Concern

Nike Says Futures Orders Don't Matter; Some Analysts Agrees

Latest Ratings for NKE

DateFirmActionFromTo
Jan 2019Cowen & Co.UpgradesMarket PerformOutperform
Jan 2019NeedhamUpgradesHoldBuy
Jan 2019HSBCUpgradesHoldBuy

View More Analyst Ratings for NKE
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