Nike Sees the Future-Sells Shoes to Amazon Directly

After holding out as long as possible, Nike will now sell shoes directly to Amazon.com. With traditional retail flailing, Nike doesn’t have much choice, it needs to sell where the customers are, and that’s online. Sara Germano and Laura Stevens report:

Nike Inc. NKE -1.23% has agreed to sell some of its products directly to Amazon.com Inc.,AMZN +0.66% a person familiar with the matter said, a concession by the sneaker giant that it can no longer afford to ignore the online retailing behemoth.

While Nike sells its shoes and sportswear through department stores and specialty retailers, it has refused to sell directly to Amazon, fearing it would undermine its brand. But with traffic to traditional stores on the decline and chains like Sports Authority disappearing, Nike has been ramping up efforts to sell directly to consumers, especially its own e-commerce efforts.

Both of Nike’s biggest rivals, Adidas AG ADDYY 4.34% and Under Armour Inc.,UAA -1.23% sell some of their products directly to Amazon, which has been working to add fashion brands and apparel to its inventory.

News of the Amazon deal punished shares of retailers, with Foot Locker Inc. FL +0.49%falling 5% and Finish Line Inc. FINL -1.28%down 4%. Shares of Nike gained 2%.

Nike executives have been in talks with Amazon for weeks about cracking down on counterfeit product and the proliferation of unauthorized third-party sales on the site, this person said. The two companies have reached an agreement where Nike would agree to provide some product directly to Amazon in exchange for Amazon policing counterfeit and third-party sales, this person said.