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Nike to end supply agreements with retailers by 2021

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Nike to end supply agreements with retailers by 2021

Nike Inc. will terminate its supply agreements with dozens of retailers in a bid to better align its distribution strategy, The Sunday Times reported Oct. 13, citing the company's letter to independent partners.

The footwear giant reportedly plans to stop supplying retailers by 2021 and the termination could begin as early as 2020.

CEO Mark Parker intends "to reduce the number of retailers [Nike] uses, and instead funnel that business through its website and its own network of stores," the report said.

The move will enable the company to increase its profit margins since it will have no middlemen and less discounting, the Times added.

The strategy has raised concerns among retailers that Adidas AG could follow in the U.S. manufacturer's footsteps. "All those companies that built a business on the back of Nike and Adidas are toast — there's no way they can replace that [business]," one source reportedly told the newspaper.