Nike Cuts Ties with Several Small, Local Retailers - EFFECTIVE JUNE 30, 2013 - MORE TO COME

[spiceman80]

Yes I concur a millie %

fulton st Brooklyn was the worse, they used beating dudes over the head.

 

[spiceman80]

SON...Those Indian/Paki/Arab store owners on Fulton Ave in BK are THEE WORST. Come to find out, one of em drives down to Philly every Saturday with about 5-8 people (usually aged between 11-17, males and females...prolly the whole family) and BUYS UP ALL STOCK. I see this ****** and his family every saturday and I want to punch them all in the face. Luckily, Villa (one of his main targets) does tickets now so they came down for nothing for the recent releases (HGG 13) and I haven't seen them in a few weeks.

But it's like I said...that selling over box price is business as usual in pretty much EVERY mom and pop in NYC. I dont really bang with the Bronx, and Jamaica ave is just SOOO far on the train that I mostly just rock with Fulton mall (well used to, word got out and all the hot stuff that WAS there has been sold), but you would be foolish to think that Nike doesn't know what's going on...

Also, I dont think a lot of those Fulton Mall spots got Nike accounts, which changes everything...

lol, just read your quote after posting about the guys on fulton st. My cousin and I used to go to NJ for release in early 2000s for no tax. Before all the lines and nonsense. One time this Arab dude was there it was for jordan 12 playoffs. He bought at least 10 pairs and had his people help him take them to their van. I joked that he was gonna sell them at his store, then my cousin tells that is exactly what they do. They go out to NJ to diferent stores buy them up no tax, then sell them at their store and beat us over the head.

 

[ELTORO84]

x

 

[160jordansdeep]

Nike is not trying to upscale, they are trying to streamline their retail business and accounts. Some guy argued back and forth with me about 10 pages straight that nike was retailer freindly.

What Nike is about to do is change the business model and follow in the likes of Apple. You will be seeing more releases set for nike outlets and factory store like the KD V's. Nike is not interested in shipping shoes to a shop that is only getting 30-40 pairs. They are looking to fill orders from major retailers only or sell them direct. Nike is slowly realizing that with the current technology Brick and Motar is becoming less important and less cost effeicient, especially when they have their own retail stores to start with. Mom and Pops are just first to go, next regional chains, in which they will use the excuse that they can't compete because alot of stores get stuck with non retro items. 

I need to go back and find the post where some guy called me stupid when I predicted this was about to happen middle, end of last year.

this man could be right
makes sense

as long as their is more product (i hope) and at retail box price

i dont care if these mom and pop shops get cut out

i hope nike will check out nyc stores if your wrong
but what your saying sounds like something nike would do

 

[mcking]

THIS NEEDS TO GO ON IN NYC I KNOW ALOT OF STORES IN NYC LIKE THIS [/B



this store is the biggest cook in the sneaker retail business in ny state


this place is next to spicy action
both stores are cooks
one is just a little worse then the other




their are other stores all around the 5 boro's in nyc that do the same thing by over charging

im not talking about $10.00 or $20.00 ( in the early 2000's that was a big deal)

i talking $100.00 to $200.00 sometimes more


this place is a well known crooked local nyc chain store


there are 100's of other locations i could list

more crooks




all these places look at the online prices and follow them

if you ask why they chage so much the shop owners cry nike makes then buy all this other crap they cant sell or mark up

i can understand that but why take advantage so much

why all because of money

nike & these stores dont give a damn about the customer

nike's customers really are not the general public
its these scum bag retail locations

all the stores on fulton st in downtown bk
jamaican ave in queens
grand concourse in the bronx
all charge $100.00's over retail have been doing so for years

dont forget if these stores have true nike account's

a well known family has sneaker retail stores all over the 5 boro's of nyc doing the same thing
nike chargers them 53% of the box price that done not include shipping costs

i dont know how it is in any other state but if because of the price stores charge nike need to take a look at the nyc market

Add West NYC to this list. No royals released to public and purchased raffles necessary for yeezy 2. How can stores like this get collabs with nike and NB?

I forgot to add the scum of them all, 21 Mercer. Their scumbagness is known around the country.

 

[deltadogman1]

this man could be right
makes sense

as long as their is more product (i hope) and at retail box price

i dont care if these mom and pop shops get cut out

i hope nike will check out nyc stores if your wrong
but what your saying sounds like something nike would do

Just pay attention to the Bred XI's if they would have sold 80% of that stock in house they would have not only made more money but had better control over distribution, in terms of spreading them around and not having to stress production capacities for one model. Nike is about to have enough of whatever you want as soon as they cut alot of these accounts. The XX8's were the second model this strategy is being tested on. Watch a ton of them pop up at outlets!!!!

Secondly and most importantly who would supply their competition with product the way NIKE/JB does in a legal marketplace. Nike has a very well put together retail division in place already so unlike most other companies, they wouldn't miss a beat if they closed half their accounts. But the the only thing stopping them from just completely dropping the hammer is smaller markets where buyers trust smaller retailers and have less access to major chains and people are still weary of the internet. 

 

[MaxP_3]

Please add a few places in ATL to that list too. The shadiness that goes down here is catastrophic.

 

[sosmoove]

I hope this has absolutely 100% to do with shady stores and I hope no store is missed

 

[alp]

yeah these stores b charging a premium and then sum. Its ridiculous. But i dont know if this is the reason why nike is severing ties iwth these stores. I mean lebrons store in miami is known to charge above retail

 

[d e beatup]

As a Nike employee I have to state that my opinion is my own and doesn't reflect that off my employer.

That said, I don't want to really go in depth because I have several opinions but the defining point is as a business owner, you have to diversify your portfolio. If 80% of your sales are attributed to Nike then you clearly aren't hedging against the now realized worst case scenario of not having said product as a sales crutch.

Say what you will about the big box chains, despite being led by Nike they're still diverse in their catalog. Some Footactions even have a new adidas concept that gives HOH a serious run for its money from a visual perspective.

I don't think it's a good thing that stores have lost their accounts but I do believe you have to always be playing offense and I question their failsafe plans.

 

[martymcfresh]

so does this mean less physical locations will be receiving stock? over the years I've seen more and more small online shops opening. so nike gave them all contracts/accounts just to take them away?

 

[alp]

As a Nike employee I have to state that my opinion is my own and doesn't reflect that off my employer.

That said, I don't want to really go in depth because I have several opinions but the defining point is as a business owner, you have to diversify your portfolio. If 80% of your sales are attributed to Nike then you clearly aren't hedging against the now realized worst case scenario of not having said product as a sales crutch.

Say what you will about the big box chains, despite being led by Nike they're still diverse in their catalog. Some Footactions even have a new adidas concept that gives HOH a serious run for its money from a visual perspective.

I don't think it's a good thing that stores have lost their accounts but I do believe you have to always be playing offense and I question their failsafe plans.

i see what ur saying but without nike FTL would take a BIG hit. Only store that I can see surviving without a nike account would be kith, even WESTNYC would be ****** losing that nike account. If u r an urban sneaker store u need a nike account to make a living. Sad, but its the truth.

 

[bigmike24000]

Thanks for the insight from Philly AP. And more detailed info about NYC spots 160. Always interesting to hear first hand accounts and information.

Nike is definitely about themselves number 1, but whether its a move to put their products in spots that can correctly market it or to streamline business (both ideas I think are behind this), I think Nike does have an obligation to some of these longstanding stores in less affluent areas that really put their shoes at the forefront of the industry.

Zoom air bags and light materials will still only sell so many shoes, and at $180-$235 a pop there's a cap on what people will buy just to run into the ground on a court. These shoes are strictly fashion for a huge portion of their customers, and some of these shops and the neighborhoods they are in are what gave Nike the image they have now. And now that they've run their course in Nike's business plan, they want to pull their shoes out of shops in these areas. These shops and areas used to be what sold a lot of these items and made these items the most popular. But now that every Tom, Harry, Jamal, Aziz, Chang, Juan, and Dirk in the world are all customers buying every release, maybe Nike doesn't feel like they need that "hood" presence. Maybe we'll see a store like Mercer in every large city as Nike's attempt to not completely commercialize their product into shipping malls, although that failed at that store lol. Definitely some good stuff in here.

Took a week off from niketalk and i come back to see this.... Nike is making solid business moves to keep their shareholders.  With the "sneaker game" becoming the new fashion statement across the world, they need to capitalize. last year I touched on this point.  I'm sure it's not just shady business practices alone but I know for a fact Nike has had boutiques under the microscope, especially those with tier 0 accounts.  Here in houston a local rapper got the yeezy 2's early posted a shout-out to the Boutique he got them from, they almost lost their account.  Also their is the same guy who has a full size run of EVERY release on craigslist.... and based on his inventory he is being supplied by one of these boutiques.  Greed is never good... and this comes as a result of these small shops abusing their accounts and in turn bam...yanked but it's not just this.

Lets put it in this perspective: You own a business and you sell your product wholesale to these (small boutiques) who in turn sell them for (retail rarely) and now sometimes double triple msrp.  Since MSRP is only "suggested retail" these shops are at liberty to charge what they please... but now multiply this business decision removing accounts across 50 states.  There is some serious money to be made here... with no real cost to nike as a business as they can redistribute to their own non-outlet stores and beef up online inventory... which have the least overhead involved as all you need is a call-center which you can sub-contract out, and they already have the distribution channel in place.

So lets put numbers to this, U drop a modest 10 boutiques a state or an average of 10 since some states with many major cities will have more others less for a total of 500 stripped accounts.  We'll use jordans for this scenario since we can all relate.  Right now JB is dropping a average of 2-3 release a month.  

Lets say nike sells these jordans wholesale to all these boutiques for 50% of msrp which will average out to 80.00 a pair, and lets say nike pays 30 a pair for each shoe.

Now They pull the accounts that have done shady business or are no longer meeting their standards and keep the inventory to sell themselves. The can now sell at full msrp.

BAM!!! Their profit just went from 50 dollars a pair to 130.00 a pair per shoe!!! Now we'll say each store would get 2 full size runs or about 25 pairs.

80.00 profit x 25 pairs x 500 stores =1,000,000 profit!!!! This is per release!!!! so now 1,000,000 x 3 releases = 3,000,000 PROFIT each month!!!! x 12 equals 36,000,000 Profit per year!!!

We also know kobe,lebron and kd drop some hot shoes monthly with foamposites and other high dollar nikes.  lets just say nike does Just 4 releases a month....with the profit margin on all of these being the same.

add another 4,000,000 a month for a grand total of 48,000,000 a year plus 36,000,000 from jb for  84,000,000 PROFIT!!!!

What about the shoes all these boutiques have to buy wholesale to get the retros..... Nike redistributes to their outlets.... and raises requirements on the big box stores to buy more product to get retros... which is whats driving their business.......

Keep in mind this doesn't account for all the qs an limites shoes that drop monthly, sb's, air force 1's etc... so this move is major money for nike.

This is pure business, cutting out the middleman who in essence is no longer needed.  Not that I approve or condone... shady shops should lose their accounts but keep in mind many shady shops have direct connects at Nike too and some will never be closed... thats reality.  Good luck getting a nike account now!!!!!!

 

[grapeape]

Yeah I agree Mike, but what you quoted from me is just a post to put more ideas out and continue discussion. I essentially said the same thing as you but shortened on page 1. I think that point is obvious, especially seeing as how Jordan Brand had over $2 billion in sales alone in FY2012 and have proven that increasing shareholder wealth is the #1 priority (as it should be) even at the risk of quality of products and shutting out some key demographics. So I do agree with you completely.

That's kind of what I thought. They can keep those pairs for either their online inventory and eventual restocks down the line or they can direct them to Niketowns for release day. I though it was an option for them to up their direct sales volume while also not cutting into FTL/FNL and other large accounts inventories. Keep the big accounts happy and still get that guaranteed money upfront, increased direct sales margins, and still have more pairs available to their customers that shop at Nike owned options that just sell out of these releases all of the time at almost any realistic volume ($$$). That could be a few thousand less people on their twitter feed cussing them out every Saturday morning too hahaha....

 

[160jordansdeep]

all these small stores and local chain stores have to do is pay off there local nike rep and there good for the next year at least

i know this happens

or get an "air randy"account

 

[bigmike24000]

Yeah I agree Mike, but what you quoted from me is just a post to put more ideas out and continue discussion. I essentially said the same thing as you but shortened on page 1. I think that point is obvious, especially seeing as how Jordan Brand had over $2 billion in sales alone in FY2012 and have proven that increasing shareholder wealth is the #1 priority (as it should be) even at the risk of quality of products and shutting out some key demographics. So I do agree with you completely.

Oh yes I am in 100% agreement with you as well.  Some younger guys may not get this...but no longer are the "minority areas" nike's key demographic.  They have realized these areas are giving them the most of the bad publicity and also areas where mom and pops are more likely to charge rape prices since people are more willing to pay them whether it be drug money, government checks, etc.  I am anxious to see how this takes form when they make all of the account cuts...across the board.  I don't deal with any mom and pops here in H-town they are seriously all about money and unless u are dropping an extra bill or 2 per shoe...they r like screw u so this will shut a lot of guys down.  They are usually know to be spots for the local celebrities to score kicks.  I hope they were saving all the cash the were making from yeezy and cork releases... their gonna need it......

 

[brooklyn zoo]

A lot of mom and pop stores are getting caught selling bootlegs nowadays. Not saying that is the issue but, third party stores are pretty slick with stuff like that. 

 

[trynafeelmink]

Obviously this is going to make major profit for Nike, but it can also have a negative effect on the impact of Nike's sneakers moving forward... It's great for the collectors and people who genuinely just want to own a shoe they like w/o all the hooplah and hype surrounding it. Over the past few years the hypebeast has become a mainstay in the sneaker culture and by closing down boutiques/ mom & pops i think it would really start to take a hit on the anticipation of the shoes.

Whether we like it or not hype is one of the main factors in people buying a shoe now. they have a whole generation of new "sneakerheads" who are accustomed to this style of business from Nike. So say they close all M&P stores and beef up their stock online, niketowns, Big retail stores... you now have a sneaker that is significantly more available and affordable. That boutique price & resell price of 500-1000k no longer exist & you have to wonder in this climate, does the demand for the shoe stay the same.

I worked at FL from 2006-2010 obviously the demand for some Nike's & Jordan Retros have always been high but over the past three years things have hit a fever pitch like never before. EVERYONE wants a pair of Jordans or foams because they see the celebs with them, They know the ridiculously high prices they go for in those M&P stores, they seem to give you a certain exclusivity if you own them. All of those mall fights, Lines that form several days before release, High prices on Ebay etc etc may all sound bad for business but over the past few years i believe those incidents haven't done anything but elevate and enhance the perception and aura around the shoe.

If things get back to normal and suddenly that same hype isn't their what stops that new generation that was built on hype from losing interest in the sneaker because suddenly instead of going for 500$ on ebay they our now 100$ in an outlet.

 

[thatboydrew]

I am glad that Nike putting up a valiant effort to curb the reseller market...walking into a STORE charging $260 for a pair of Jordans is redic!!!

 

[deltadogman1]

As a Nike employee I have to state that my opinion is my own and doesn't reflect that off my employer.

That said, I don't want to really go in depth because I have several opinions but the defining point is as a business owner, you have to diversify your portfolio. If 80% of your sales are attributed to Nike then you clearly aren't hedging against the now realized worst case scenario of not having said product as a sales crutch.

Say what you will about the big box chains, despite being led by Nike they're still diverse in their catalog. Some Footactions even have a new adidas concept that gives HOH a serious run for its money from a visual perspective.

I don't think it's a good thing that stores have lost their accounts but I do believe you have to always be playing offense and I question their failsafe plans.

This is way off base because Nike represents the largest portion of the shoe market so their sells are going to account for the majority of sales at any retailer, that carries their products. What they are going to have to do is scale down hours, salaries and total overhead or go out of business. What we are seeing now is what any Wholesaler could do which is go mostly direct. By the time they fill FNL/FTL/Eastbay and the other major retail orders Nike is out of the red on any model everything else is meat and gravy. 

And I say again Nike has a very well established retail division of it's own, so the are in a very unique position. And let's be honest their factorystores and outlets are not cheap anymore. 5-10 years ago you could get 3-4 pairs of kicks with a 100.00. No those stores are more like primary retailers.

 

[green rhino123]

good, i'm glad some of these places are about to lose the power they abuse
this also means no more big-shot employees at these places either

the only trustworthy mom & pop in my area closed about a year ago anyway
(i guess they couldn't make ends meet selling at retail the way they did)

 

[deltadogman1]

What a lot of people are calling MOM and POPS, I consider boutique's. The Mom and Pop's I deal with have their family name on the building and look out for you. No presales but they will, reserve if they know you, they only chrge retail and they are the nicest people you want to meet. Besides if they were any other way I wouldn't give them my money to start with. I even know chain stores that operate like this, I just visit them on a regular and make conversation and only buy what I wear(1 pair) and they keep it 100.  

 

[squatchnt]

What probably happend to those stores is that they probably got greedy and somebody reported them. With all the people that hate the twitter and raffle processes they don't need anything else to deal with

like i said i think nike is trying to go upscale and tighten where their product's go

you have to remember nike makes these places sign a contract

thats why a nike/jordan retail account is worth its weight in platinum not gold

Nike doesn't care about people buying shoes with bots and such but cares about how a store runs their register, riiiiiiight. Follow the money. I'm with those who say it's about the bread. 

 

[milhaus007]

Nike shareholder since 1999 and I approve this message

 

[fahqu001]

Yeah I agree Mike, but what you quoted from me is just a post to put more ideas out and continue discussion. I essentially said the same thing as you but shortened on page 1. I think that point is obvious, especially seeing as how Jordan Brand had over $2 billion in sales alone in FY2012 and have proven that increasing shareholder wealth is the #1 priority (as it should be) even at the risk of quality of products and shutting out some key demographics. So I do agree with you completely.

Maybe I'm missing something. And I'm not completely disagreeing, so don't think that. But, can't Nike make as many shoes as they want? Whether Mom and Pops took up 1 or 1 million shoes, Nike is at liberty to make as many shoes as they like. At the end of thee day, money is money. So regardless of whether they're charging FLT, FNL, FA, or a Mom and Pop, $80, it is still $80. Kinda like the Galaxy Foams. I'm sure Nike could have sold them on their site if they wanted, but they didn't (if I remember correctly???).I do completely agree it's kind of a black on the shoe business when they're charging this exhorbitant prices, but the whole cut the mom and pop out for Nike's own inventory doesn't seem too logical to me. But hey, I'm probably reading the forum wrong or maybe viewing it from the wrong angle. Anywho, still good to see the shoe business deadbeats cut out if they're truly raking people over the coals. I guess the only silver lining is you're at least getting a receipt for the Mom and Pops if you're trying to trade or get rid of them by selling lol