![Data shows retailers will cut prices on more Nike sneakers in 2024](https://i-invdn-com.investing.com/trkd-images/LYNXMPEK110AI_L.jpg)
©Reuters. File Photo: Nike-owned Converse shoes are seen at the Woodbury Common Premium Outlets store in Central Valley, New York, USA, on February 15, 2022.REUTERS/Andrew Kelly/File Photo
Written by Catherine Masters
NEW YORK (Reuters) – Retailers cut prices on twice as many items Nike According to analysis firm Vertical Knowledge, (New York Stock Exchange:) Sneaker sales prices will be higher in 2024 than two years ago, typical of sportswear giants amid intense competition from rival sneaker brands. The company’s strong pricing power is at risk.
Researchers compiled online price data from a sampling of eight national chains — foot locker (NYSE:), Dick’s Sporting Goods, and Macy’s, among others, found that retailers slashed prices on Nike sneakers by an average of 44% in 2024. That’s up from his 19.4% in the comparable 2022 period, according to Vertical Knowledge data. , provided exclusively to Reuters.
This trend marks a break from the past, when Nike retailers enjoyed the ability to sell Nike inventory at full price, especially lifestyle shoes like the Nike Air Jordan 1 Retro High. Nike’s regular retail prices range from around $50 for basic Nike running shoes to over $200 for special release Nike sneakers.
Efforts by some retailers to lower the prices of Nike sneakers could spell trouble for Nike, one of the world’s largest sportswear companies. “These are companies that are very good at charging premium prices to the mass market,” said Brian Yachtman, president of YCG Investments, which owns Nike stock.
On Wednesday, Foot Locker in New York City had Nike discount shoes on display, with LeBron 20 basketball sneakers marked down to $129.99 from their original price of $170, and Nike Air Max styles also on sale. Macy’s flagship store in Herald Square also had multiple Nike Air sneakers on sale, including the Air VaporMax and Air Huarache.
The average price of Nike sneakers at major retailers like Macy’s fell from $103.61 in the first quarter of 2022 to $79.92 in early 2024, according to the data. According to Nike’s most recent annual report, Nike wholesales its products to “thousands of retail accounts.”
A Nike spokesperson said the company “has a highly diversified wholesale portfolio, with no single partner accounting for a significant portion of our overall wholesale revenue.”
Dick’s Sporting Goods did not respond to requests for comment, while Foot Locker and Macy’s declined to comment.
The same eight major retail chains sell sneakers from On Running, a fast-growing Nike rival focused on cushioned running shoes, and Hoka, owned by Deckers, for an average of about $148 a pair, according to the data. are doing.
Nike investor Jachtman said in a recent interview that discounting is a concern. “What I’m watching for Nike is when they stop the promotional pricing and go back to basic pricing.” His company also owns Amazon (NASDAQ:) and his LVMH stock. I am.
After exiting some wholesalers two years ago to focus on direct-to-consumer sales, Nike announced in June that it would return to retailers such as Designer Brands (NYSE:)’s DSW. This shows that these chains are still good companies. A key way Nike reaches shoppers.
“Market stuffing”
Nike surprised investors in late December by lowering its 2024 annual sales forecast. At the time, Chief Financial Officer Matthew Friend said the company was addressing “promotion-heavy markets,” particularly in its online business, and would ramp up sales reduction plans. Supply of “major franchises” amid uncertainty about consumer demand.
For years, Nike has marketed its shoes as a popular premium product. Friend also told investors in December that Nike’s gross margins would expand this year, in part due to “strategic” price increases.
But footwear industry analyst Matt Powell said that despite signs that shoppers are tired of Nike’s shoes, Nike is still selling its best-selling products, including retro lifestyle sneakers and Jordan Brand reissues. He said the company is “crowding the market” and releasing too many styles to retailers.
A sample of eight retailers whose pricing was tracked by Vertical Knowledge included Hoka sneakers (4.5%), Adidas (OTC:) shoes (18.9%), Swiss-based ON running shoes (23.1%), Or Puma style (37.4%), according to the data.
Discounts could make Nike less attractive to consumers. Powell said if shoppers frequently see discounts on Nike styles, “Nike risks becoming just another shoe brand” in their eyes.
Another sign of waning shopper demand: Nike styles, including the Nike Dunk Low Retro, are also dropping in price on the sneaker resale market. Nike released 116 new versions of its shoes in 2023, compared to 31 in 2019, said Dylan Dietrich, research director at Altan Insights, which tracks the collector’s sneaker market.
At the end of 2021, some releases of the shoe are selling for up to $340 on resale platforms like StockX, nearly triple Nike’s retail price of $115. However, most Dunk Low styles are now available for near or below their original list price.