Nike Ends China Online Distribution Deal, Topsports Shares Plunge 28%
NKE is trading near its 52-week low of $40 (7.4% above the low).
Summary
Nike is terminating online sales through its existing distributors in mainland China, shifting to its own website, app, and flagship stores on Tmall, JD.com, and Douyin starting January. The move is part of a strategy to tighten control over a fragmented digital marketplace that has undermined brand consistency and growth. Topsports International, Nike's largest distributor in China, saw its shares plunge as much as 28% after receiving formal notice; online Nike sales accounted for about one-fifth of Topsports' revenue. Nike's China revenue fell 12% in the latest quarter and 11% for the fiscal year amid fierce competition from local rivals like Anta and Li Ning. Citi analysts warn the direct-to-consumer push is risky while offline traffic remains weak, potentially leading to further market-share loss and store closures. This follows Nike's ongoing restructuring, including layoffs and a new CFO appointment, and comes as the company already projected a low- to mid-single-digit sales decline.
At the time of this announcement, NKE was trading at $42.96 on NYSE in the Trade & Services sector, with a market capitalization of approximately $63.7B. The 52-week trading range was $40.00 to $80.17. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.