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The Wall Street Journal this morning reports that athletic gear giant Nike "has agreed to sell some of its products directly to Amazon ... a concession by the sneaker giant that it can no longer afford to ignore the online retailing behemoth."

The decision amounted to a public declaration that the company's traditional approach, selling to traditional stores and chains, is not enough. "News of the Amazon deal punished shares of retailers, with Foot Locker falling 5% and Finish Line down 4%. Shares of Nike gained 2%." The story notes that "Foot Locker and Finish Line each identify Nike as their largest vendor in securities filings, accounting for 68% and 71% of merchandise purchased last year, respectively."

The Journal reports that "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 ... 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."

The story goes on: "The agreement between the two companies comes as both are making changes to their strategies. Amazon on Tuesday launched Prime Wardrobe, a service that lets customers try on apparel at home before deciding on a purchase.

"Last week, Nike announced plans to eliminate more than 1,000 jobs, or about 2% of its workforce, and scale back the number of sneakers and sportswear it makes. Nike sales have declined in recent months as the sportswear industry grows more competitive."
KC's View:
Nothing wrong with Nike realizing that because its customers are taking a now well-worn path, it needs to do the same. The sad thing is how fast the markets react and punish the old ways of ding things. Not much that can be done about it, though ... The ways of the Lord are often dark, but never pleasant.