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Nike will no longer sell directly to Amazon



Valentyn Ogirenko | Reuters

Nike would stop selling merchandise directly to Amazon, as part of its push to sell more directly to consumers, the company confirmed to CNBC. 2017. At this time, Nike has agreed to sell a limited product assortment to Amazon, in exchange for more stringent policing of counterfeits and restrictions on the unsold sales of its products. That includes Nike's underwear, clothing and accessories.

Prior to 201

7, Nike rejected such a deal with Amazon, focusing its attention on its own online marketplace and stores. The fear for many brands has always been that, through partnerships with Amazon, a company loses control over how its brand is represented on the site.

"As part of Nike's focus on enhancing consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot at Amazon Retail," a Nike spokesperson told CNBC in an email statement. "We continue to invest in strong, unique partnerships for Nike with other retailers and platforms to seamlessly serve our customers worldwide."

The spokesman added that Nike will continue to use Amazon Web Services to operate the website and several mobile apps, such as SNKRS.

Bloomberg first reported the change on Tuesday night. Amazon did not immediately respond to CNBC's request for comment.

Nike now claims that it brings in about 30% of annual sales from direct consumer business. Some of the largest wholesale partners include Foot Locker, Dick's Sporting Goods and Nordstrom. And while it's still investing in those relationships, it's too late to invest in building Nike's flagship stores and upgrading its own apps and websites.

Nike to leave Amazon is also following the recently announced hire of John Donahoe, a member of the Nike board, as the next CEO of the sportswear store. Donahoe is a former CEO of eBay and a board chairman at PayPal, a sign that Nike is committed to e-commerce.

Current CEO Mark Parker announced in late October that he would step down from his post in 2020.

Parker said in an interview with CNBC's Wilfred Frost that Donahoe should "enable the next that level of growth, "as digital, for the company.

Amazon, meanwhile, has been trying to become a bigger name in fashion for years now. It launched more of its own clothing brands, partnered with influencers to tout items and tried to outdo other big-name brands for sale on its site. Some of these include PVH's Calvin Klein and Chico's.

Evercore ISI analyst Omar Saad says Nike's move has left him "wondering if more brands will follow." . Amazon's shares also dropped less than 1%.


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