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

[riquejg91]

I pretty much agree with this. There's a mom and pop around my way that's guilty of everything people think is the reason behind these mom and pop stores getting shafted. With the mom and pop store in my area, **** really hit the fan with the bred 11s this last holiday. He went from pre orders, which was already corny to me because he picked who he wanted to pre order, to a raffle and raising the price to $225 a pair. The guy is a crook and he needs to be one of the people added to this list. I'm about 40 minutes away from the Philly area if anyone was wondering.

 

[deltadogman1]

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.

Nike will only get grimier because it is very hard to increase stock value when you are are probably already close to your ceiling in terms of market value. Nike has a very hard task ahead of itself but these little measure are just the first step to get them their. Their are very few things that they can do, other than pump out more colorways, close accounts(cut out the middle man), try to expand into crossover markets, or.........................not much left. LOL

 

[alp]

I pretty much agree with this. There's a mom and pop around my way that's guilty of everything people think is the reason behind these mom and pop stores getting shafted. With the mom and pop store in my area, **** really hit the fan with the bred 11s this last holiday. He went from pre orders, which was already corny to me because he picked who he wanted to pre order, to a raffle and raising the price to $225 a pair. The guy is a crook and he needs to be one of the people added to this list. I'm about 40 minutes away from the Philly area if anyone was wondering.

compared to what stores in nyc were charging, $225 is nothing. Thats basically $25 extra after taxes, not too bad imo

 

[passitback]

compared to what stores in nyc were charging, $225 is nothing. Thats basically $25 extra after taxes, not too bad imo

Exactly...

These dudes OOS don't know how good they got it. 

Copping in NY has become an art form... 

 

[9000 watts]

Very interesting. Damn, sucks for anyone who relies on mom n pop joints, and I also feel bad for the economies of the neighborhoods. However, playing devil's advocate, if the stores are engaging in shady ****, props to Nike for showing some cajones and cutting them off. I for one can't stand sneaky business, and if price inflations, raffle rigging, early releasing, etc is going on than that is absolutely unacceptable and definitely against their agreement with Nike. If these violations are truly happening i 100% support Nike on this call. I only wish they would do the same to the many corrupt big chain stores (HOH, FNL) and cut off some of their locations. Would really send a message.

However, there is also the other argument that Nike is just further trying to boost the "exclusivity" and drive up the hype by taking the kicks out of the hood. If these stores truly are innocent of wrongdoing I suspect this is to blame, and it's just another cog in the wheels of hypebeast-ism. I obviously don't know for certain which is true, but this is definitely an interesting move and I will be curious to see how it unfolds.

With that being said, I personally don't deal with mom and pop stores, however if there was one in my neighborhood that I found and loved I would certainly be willing to try it. I would NOT however pay any ridiculous price.

 

[bucknuteagle]

Nike will only get grimier because it is very hard to increase stock value when you are are probably already close to your ceiling in terms of market value. Nike has a very hard task ahead of itself but these little measure are just the first step to get them their. Their are very few things that they can do, other than pump out more colorways, close accounts(cut out the middle man), try to expand into crossover markets, or.........................not much left. LOL

Don't underestimate how much Nike can still expand. They might be reaching critical mass when it comes to American basketball/fashion, but there's a big world out there that they've barely begun to conquer. China is a huge market for them, as well as expanding into other sports (soccer especially). They could also spin off a high fashion brand (or more likely simply buy an established one). Not to mention there's the whole idea of them diversifying into sports team ownership. I'm sure the NFL/NBA/whoever might claim a conflict of interest initially, but let's be real, money talks and Nike's got TONS of money.

And those are just ideas that I came up with in 5 minutes sitting on my laptop after a long day at work, imagine what the people who actually get paid to do this have come up with.

As for the boutique/mom and pop shops closing. I really don't see how more people didn't see this coming. Did any of you really think that Nike was going to keep letting these small places ruin its reputation? Backdoor selling, selling over retail, etc. were not going to stand for any extended period of time with how widespread it was. Especially because, as many people have already said, Nike has one of the best distribution channels in the industry. Honestly if I had the choice I would prefer to go to a Nikestore/Factory Store instead of almost any other retailer anyway. The only exception is the small, legit boutiques which Nike probably won't touch.

 

[deltadogman1]

Don't underestimate how much Nike can still expand. They might be reaching critical mass when it comes to American basketball/fashion, but there's a big world out there that they've barely begun to conquer. China is a huge market for them, as well as expanding into other sports (soccer especially). They could also spin off a high fashion brand (or more likely simply buy an established one). Not to mention there's the whole idea of them diversifying into sports team ownership. I'm sure the NFL/NBA/whoever might claim a conflict of interest initially, but let's be real, money talks and Nike's got TONS of money.

And those are just ideas that I came up with in 5 minutes sitting on my laptop after a long day at work, imagine what the people who actually get paid to do this have come up with.

As for the boutique/mom and pop shops closing. I really don't see how more people didn't see this coming. Did any of you really think that Nike was going to keep letting these small places ruin its reputation? Backdoor selling, selling over retail, etc. were not going to stand for any extended period of time with how widespread it was. Especially because, as many people have already said, Nike has one of the best distribution channels in the industry. Honestly if I had the choice I would prefer to go to a Nikestore/Factory Store instead of almost any other retailer anyway. The only exception is the small, legit boutiques which Nike probably won't touch.

Nike is already into fashion and as far as high end stuff the best they could do is buy a brand or they would be faced with the same problem their current competition has. I give you China and very few other country's but honestly they would only be able to move limited quantities and limited models(affordable models) because everyone is not as image driven as American consumers. Sports mechandise yes but that requires alot of patience in terms of sales which i think Nike is not acustomed to. Team branded stuff sits alot and goes to clearance even more. And again to talk expanding into other markets, Nike would ultimately be faced with offering people in third world counties products that they can't afford, want only to have them sell them internationally to basically the same people buying now, America, etc.... Most foreign websites and blogs are pushing running shoes and none basketball models.

 

[grapeape]

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

Oh yeah, Nike can make as many pairs as they'd like.  But look at the cries from people who miss out every single week... "NIKE MAKE MORE PAIRS!  MAKE ENOUGH PAIRS SO THAT EVERYONE CAN HAVE A PAIR IF THEY WANT THEM!"  We hear that all of the time, and then the next answer given is ....Exclusivity.  Nike thrives off of this.  Royal 1's and  88 WC3's are great current examples of just Jordan Brand doing this.  Corks in the LBJ X model is an example.  Most nice foams and really any shoe that you see with a $500 and up resell value are examples.  Unless it's an OG that is long gone from the market and more of them can't be thrown in a factory and made right now, then why doesn't Nike JUST MAKE MORE.  They want the numbers to be set at certain limits, and they set those limits so that the shoe is hyped up to sell quick and sell out, create its own buzz and advertising, and leave customers wanting that next model that is similar, just the same brand, or even settling for another new Nike that same release day because they just could not get that limited shoe they wanted.

This is pretty much how Nike has been operating the last few years and they are growing exponentially, in part, because of this.  Everyone on here knows of a shoe they think is just hideous and atrocious, yet if that shoe is smacked with a limited tag it is gone in mere seconds.  Nike uses this to their advantage in so many brilliant ways.  But in reality, customers know Nike isn't going to change their production plan because 10,000 people throw a fit on twitter.  But Nike also doesn't want their name being slandered every single weekend.  When it adds up to 2 years worth of this, it becomes an image problem.  They can't solve the problem of there NEVER being enough shoes for everyone while still following their current very successful model of generating hype to generate sales, but if they can make it appear that their retail options are giving customers at least the best chance at getting their shoes, then that heat gradually begins to move to the FNL and FTLs of the world.  When FNL/FTL/EB, etc... start to sell out quicker than NDC (or through the grapevine people find out that more and more people are getting shoes from NDC than before) or when sales in store at those retailers always have 25-50 pairs for sale and anyone with twitter is able to get a feel for the amount for sale at Niketowns, and see that it is much more pairs than other retailers, the slander will move towards the other retailers twitters and their customer complaint numbers. 

Increasing distribution through their own retailers is a move to say "Hey, we offer you a better chance and more shoes than anyone else."  And for a lot of these not so intelligent tweeters and "complaint questionnaire completers", this is just enough of a diversion for them to take the venom elsewhere.  And there are still many cost effective reasons for why it is better for Nike to distribute their products through their Nike owned options.  But being able to do this while still keeping your guaranteed money (FNL, FTL, EB, etc...) at the level they are at is a win-win for the companies still involved at that point.  This is just an explanation of why i think it's an effective option and in no way a rebuttal to anything you said.  Just trying to answer your first question with reasons why I feel Nike won't go the route of increasing total production numbers.

 

[deltadogman1]

Oh yeah, Nike can make as many pairs as they'd like.  But look at the cries from people who miss out every single week... "NIKE MAKE MORE PAIRS!  MAKE ENOUGH PAIRS SO THAT EVERYONE CAN HAVE A PAIR IF THEY WANT THEM!"  We hear that all of the time, and then the next answer given is ....Exclusivity.  Nike thrives off of this.  Royal 1's and  88 WC3's are great current examples of just Jordan Brand doing this.  Corks in the LBJ X model is an example.  Most nice foams and really any shoe that you see with a $500 and up resell value are examples.  Unless it's an OG that is long gone from the market and more of them can't be thrown in a factory and made right now, then why doesn't Nike JUST MAKE MORE.  They want the numbers to be set at certain limits, and they set those limits so that the shoe is hyped up to sell quick and sell out, create its own buzz and advertising, and leave customers wanting that next model that is similar, just the same brand, or even settling for another new Nike that same release day because they just could not get that limited shoe they wanted.

This is pretty much how Nike has been operating the last few years and they are growing exponentially, in part, because of this.  Everyone on here knows of a shoe they think is just hideous and atrocious, yet if that shoe is smacked with a limited tag it is gone in mere seconds.  Nike uses this to their advantage in so many brilliant ways.  But in reality, customers know Nike isn't going to change their production plan because 10,000 people throw a fit on twitter.  But Nike also doesn't want their name being slandered every single weekend.  When it adds up to 2 years worth of this, it becomes an image problem.  They can't solve the problem of there NEVER being enough shoes for everyone while still following their current very successful model of generating hype to generate sales, but if they can make it appear that their retail options are giving customers at least the best chance at getting their shoes, then that heat gradually begins to move to the FNL and FTLs of the world.  When FNL/FTL/EB, etc... start to sell out quicker than NDC (or through the grapevine people find out that more and more people are getting shoes from NDC than before) or when sales in store at those retailers always have 25-50 pairs for sale and anyone with twitter is able to get a feel for the amount for sale at Niketowns, and see that it is much more pairs than other retailers, the slander will move towards the other retailers twitters and their customer complaint numbers. 

Increasing distribution through their own retailers is a move to say "Hey, we offer you a better chance and more shoes than anyone else."  And for a lot of these not so intelligent tweeters and "complaint questionnaire completers", this is just enough of a diversion for them to take the venom elsewhere.  And there are still many cost effective reasons for why it is better for Nike to distribute their products through their Nike owned options.  But being able to do this while still keeping your guaranteed money (FNL, FTL, EB, etc...) at the level they are at is a win-win for the companies still involved at that point.  This is just an explanation of why i think it's an effective option and in no way a rebuttal to anything you said.  Just trying to answer your first question with reasons why I feel Nike won't go the route of increasing total production numbers.

I sort of agree with you in that most of your statement would be great strategy wise but I AM ALMOST CERTAIN that Nike has double production on most models. But as you said they are in damage control mode at all times so they trickle them out to make people believe they have had more chances than they really have had to get the shoe, which they have in terms of release dates but as we learned with the last 5-10 releases, the production numbers were set from the beginning, because the dates are from the initial run.

 

[alp]

Exactly...

These dudes OOS don't know how good they got it. 

Copping in NY has become an art form... 

word lol

 

[fprince]

Sneaker Politics in Louisiana is crooked... And they tell customers that they hook up people.. Infact the Baton Rouge, Louisiana location's has actually got into a twitter beef with LilWayneHQ fansite claiming they have been hooking his crew up for years. I am surprised Nike hasnt shut them down.

 

[deltadogman1]

Sneaker Politics in Louisiana is crooked... And they tell customers that they hook up people.. Infact the Baton Rouge, Louisiana location's has actually got into a twitter beef with LilWayneHQ fansite claiming they have been hooking his crew up for years. I am surprised Nike hasnt shut them down.

Probably just stunting!!! I'm sure that anybody that Nike Reps know is a legit member of YMCMB, has plenty access to whatever!

I hope this name dropping doesn't get reckless and a legit shop gets burned because of somebody with a grudge.

 

[d e beatup]

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.

I never disputed that number wasn't the major player for retailers. I argued that as a retail location you have to have a backup plan because it's not smart business to throw all your eggs in one basket.

Nike and Apple are extremely similar. Both are generally viewed as the dominant forces in their industries and their success greatly drive from innovation, marketing, and brand loyalty. Apple has an extremely successful digital front and does equally well at B&M. Even though their products are sold through third party retailers, Apple can sell all their lines 100% in-house if they wanted to and remain a resounding success. While many customers would just settle for the quick alternative in an Android phone or Ultrabook, the brand loyalty is so strong that iUsers would do what it takes to get the newest products from Apple directly.

Even though the iPhone is the top seller across all carriers, providers still hedge against uncertainty by stocking Android, Windows Phone, even still BlackBerry, despite the easy profits Apple devices deliver.

And let's be real, no one goes to a Mom & Pop to get some Jordan socks or a Brasilia duffle or a walking shoe. Many do have good customer service but most boutiques are just an alternative to get Retros and statement releases. It's not like it's '06 and you have to hit up the local spot for a LS release either.

I know my points bounced around ( tough when on a mobile) but basically if I owned a shop and I knew that my relationship with Nike was 1000x more essential to my success than theirs, I would always safeguard against the worst case scenario of losing my account.

 

[fprince]

Probably just stunting!!! I'm sure that anybody that Nike Reps know is a legit member of YMCMB, has plenty access to whatever!

I hope this name dropping doesn't get reckless and a legit shop gets burned because of somebody with a grudge.

Hahaha not a grudge... All of us folks in NOLA Sneakerheads Pickups & Info ALA,MS,TEX have talked about this like 10 days ago.

 

[naphyde]

I doubt any major chains would be able to survive if nike decided to pull their accounts.
Im not sure if you guys remember.. but few years ago.. FTL wasnt allowed to sell any jordan retros. We all know FTL is a major chain, and they were almost crippled from just jordan retros.

 

[bigmike24000]

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.

I partially agree and disagree.  The hype behind many shoes is fueled by hype an social media and of course...celebrity marketing but also a very big factor is past selling history of that shoe.  Nike and Jordan can retro certain shoes and watch them sell out every time, without any extra hype behind them, because of the shoes history.  I too worked for footlocker , but from 1999-2002.  When concords dropped during that time frame along with few other retros then they were still an instant sell out and i was in a footlocker in the mall.  

Truth is nike will not close all boutiques, and those with their accounts will still overcharge for a shoe based on the past history and hype.  Boutiques are only a small factor in the resell hype of a shoe.  Most of us aren't even aware of them because they sell to their "elite" and those few will be the ones hurting. You will still have ebay "pre-orders" and online hype which will forever fuel the high prices of certain shoes.  For example, Never will future yeezy's releases go for retail outside of online because of the past releases and if you are able to get them it will be raffle or connect basis... which we all know is mostly BS.

With the "new culture" hype is a given... but with this move we are going to see fewer ebay pre-orders since most of these get their inventory from the boutiques.  Also I'm sure nike has done research on a lot of these places, and they know their inventory is being sold for crazy amounts over retail...this won't stop all of it either, but it will put more money in Nike's pocket.  

Retros will no longer hit outlets unless b-grades....and in the future this may change but no time soon... just my two cents...

 

[riquejg91]

compared to what stores in nyc were charging, $225 is nothing. Thats basically $25 extra after taxes, not too bad imo

There's no tax on sneakers in PA so it's actually a $65 increase in price. The price would definitely be hiked up more if we had tax on sneakers in PA.

 

[passitback]

LOL, dudes are going in on the mom and pop shops in NYC. 

LOLOLOLOLOLOLOLOL Good!

 

[dtb00201]

Nike could seriously just cut ties with everyone and create Nike towns everywhere. The could cripple footlocker.

 

[jstarks2380]

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

View media item 366425
this store is the biggest cook in the sneaker retail business in ny state

View media item 366509this 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
View media item 366427
there are 100's of other locations i could list

more crooks
View media item 366429
View media item 366430
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

My first post. I use to work at transit/Michael k/ active wear house. They have a store a in Newport mall in jersey city too. The owner is the biggest whole ever. He has 3 eBay stores lordofthesole, solemaster2012 and one more with the initials KFu. Instead of giving his 5 stores the new releases he would give each store about 20-25 pairs and sell the rest on eBay. Nike has been called because he does not have the authority to sell on ebay. He is violating his contract. The owners name is Haim Kedmi..
They mark up sneakers over 100%. The breds in men's sizes are being sold for $325. $250 gs sizes. The 13's he is selling for $325. The gmp's he was selling for $750 but finally lowered to $500. They get the sneakers early and will sell them the day they receive them but will not give the customer a receipt so they don't get caught. They mark up prices on everything. I hope Nike catches him and snatches his contract.

 

[missmymoney]

I have never been to a B&M store and seen retro Jordans at retail. I'm glad they are cracking down. They always charge more than double. I wouldn't mind like $20 extra but they know what they have and people will eventually buy them so they charge ridiculous prices.

 

[Cryptomoon]

To be honest it's the mom and shop's supplier they get money on the side too.

 

[dwileykyot]

I'm glad this is happening...

My local mom and pop has been raping the community since the concord release... Charged $300.

 

[alp]

There's no tax on sneakers in PA so it's actually a $65 increase in price. The price would definitely be hiked up more if we had tax on sneakers in PA.

$225 compared to $350(even more at some spots smh), which would you chose? At $225 ppl in nyc would buy up the whole stock

 

[skb1041]

Nike wouldn't just cut ties with these shops for no reason...

there has to be a reason behind this (selling early, selling over retail would be my best bet)