Nike is finding it more difficult to clear its inventory in light of current economic challenges and is resorting to discounting to boost sales. The athletic wear brand’s CFO Matt Friend, said Nike plans to continue promoting its direct-to-consumer business. Nike’s business with wholesale accounts fell to 56 percent in May, down from 70 percent four years ago.
Nike Discount or Lose Business
A Nike discount is easier than ever, thanks in part to the inflation that many retailers have used to increase overall prices of their products. As a result, Nike stock fell -2.76% and is having trouble clearing its inventory.
In order to makeup for these pitfalls, Nike is betting more on its DTC business model and offering new steeper discounts to consumers.
And with less wholesale accounts, it is critical for Nike to reach its consumers directly if retailers are carrying competing brands and products.