The risky strategy behind Nike’s massive holiday discounts

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Subscribe to enjoy similar stories. During one of the busiest shopping weekends of the year, Nike was the only brand to have a 30% discount on most of its footwear at Macy’s famous Herald Square location in New York City. Nike is in a race for cash.

Chief Executive Elliott Hill said after he took over in October that his top priority was clearing out the company’s inventory. The company is slashing prices on its website so aggressively that it is not only risking its own holiday sales but also weighing on its retail partners. The sneaker giant will deliver quarterly results Thursday for the quarter ended Nov.

30, and it is expected to report its third consecutive sales decline—a 9% fall from a year earlier, according to analysts polled by FactSet. Hill, a Nike veteran who returned to lead a comeback, is expected to lay out his strategy after a year of bad results. The discount-driven cleanup has already made a dent on the results of some of Nike’s large partners.

A pair of Dunk sneakers sells for $115 at Dick’s Sporting Goods or Foot Locker but shoppers can get the same shoes for $85 on Nike’s website. “It impacts perception of the product by the consumer, it impacts negatively the brand," JD Sports CEO Régis Schultz said in November about Nike’s discounts. Nike is now selling more to retailers such as Foot Locker and Macy’s than it did a couple of years ago.

It is also rekindling relationships with retailers such as DSW that it cut ties with in 2022 under former CEO John Donahoe to focus on selling items directly to consumers. The strategy yielded record profits at first, but early last year, executives realized they were stuck with too much merchandise and needed help unloading it. Academy Sports & Outdoors CEO Steve