Nike Pulling Products from Stores in Low-Income Urban Areas

[redheadbaker]

This was on a local news site, so I don't know if it's happening in other areas, too. 

One Of The Largest Makers Of Athletic Gear In The World Is Pulling Its Items Off Some Local Store Shelves

PHILADELPHIA (CBS) - One of the largest makers of athletic gear in the world is pulling its items off some local store shelves.

In an Eyewitness News exclusive, retailers tell us they believe they are being discriminated against by Nike.

It’s the last thing store owners ever expected.

They are receiving letters and emails from Nike, telling them they can no longer sell their gear. They say it’s a crushing blow to the business and wonder why.

For 16 years, Top Sportswear served shoppers in North Philadelphia. In Olney, Real McCoy Sports for 23 years and Shoe Plus Athletic Footwear has been around the Nicetown-Tioga Neighborhood for 35 years.

And shoppers like Regetta and Blair Simmons appreciate having these stores within walking distance from their homes

Blair Simmons of North Philadelphia said, “They give us good service here and they treat us right here.”

But one by one, according to business owners, six stores so far in Philadelphia and Camden have gotten emails from Nike: One of which read in part, “No disrespect to our 23 years of relationship” and letters which read, “Effective June 30th.. Nike is exercising its right to terminate your accounts.”

Keith Sherman, Real CcCoy Sports Manager, “As far as sales for this store, you’re talking about 75-80% Nike. So you cut out the Nike that pretty much cuts me out too.”

Sherman has managed the Olney Sporting Goods store for 21 years and hearing Nike explain in an email quote, “We are a premium brand and our brand deserves the best platform” is troubling.

Sherman said, “We are the small mom/pop shops, we’re the ones being cut out.”

In a statement, Nike told us:

“Nike is constantly evaluating its distribution needs with a view to enhancing its brand. This includes adapting our distribution strategy to the changes in our consumers’ purchasing behavior, the retail landscape, and our brand strategy.”

But for the retailers we spoke with, their interpretation is much different.

Sherman explained, “I mean, us, urban, the hood.. We built that, we built Nike. We helped that brand get up there and this is what we get in return?”

Nike is so far confirming that it will no longer be accepting new orders from some accounts. So we asked Nike why these neighborhood stores were chosen and in all, how many accounts are being terminated but we have not yet heard back from them.

philadelphia.cbslocal.com/2013/04/12/one-of-the-largest-makers-of-athletic-gear-in-the-world-is-pulling-its-items-off-some-local-store-shelves/

[IIOY]

I don't claim to be an expert on Nike, but isn't the company shooting itself in the foot by pulling its products from these areas? Nike sells well here, yes?

[redheadbaker]

Apr 13, 2013 8:09:59 GMT -5 IIOY said:

I don't claim to be an expert on Nike, but isn't the company shooting itself in the foot by pulling its products from these areas? Nike sells well here, yes?

Yes, they do. 

[summer]

That's effed up. Those communities have been supporting Nike for decades.

Though I wouldn't mind people deciding to do better things with their funds than buying $200 sneakers. May be a good time to give Nike the boot.

[NitaX]

Apr 13, 2013 8:09:59 GMT -5 IIOY said:

I don't claim to be an expert on Nike, but isn't the company shooting itself in the foot by pulling its products from these areas? Nike sells well here, yes?

Yep. And it's a hard habit to break. I bought Nike for YEARS. I only recently stopped because I started running and discovered that Nike wasn't the best shoe for my stride. But for your average urban dweller, you will find more Nike shoes in their closet than the Lord allows.

[heyjude]

This seems like a non story. Companies move product around all the time to meet business goals.

It's not like the word "Nike" = food or medical care. Because then we would really have a story.

[heyjude]

For example Apple is very picky on who can become a licensed Apple retailer. Or to use inflammatory verbiage, they discriminate.

[summer]

Apr 13, 2013 9:16:48 GMT -5 heyjude said:

This seems like a non story. Companies move product around all the time to meet business goals.

It's not like the word "Nike" = food or medical care. Because then we would really have a story.

It matters what stores or in your neighborhood and what stores/products choose not to be. And it matters whether or not you don't want certain communities associated with your brand. People in the hood notice the difference between the caliber of products in their neighborhoods vs the suburbs. It's lost on no one that they get left with off-brand, generic, 2nd/3rd rate knockoffs of everything from grocery stores, shoe stores, etc.

And it has economic implications for the neighborhood. The one guy says Nike is most of what he sells and if ge doesn't have Nike, he doesn't have a business.

This is absolutely a story.

[iammalcolmx]

I think the customers will travel to buy the shoes, however those poor shoe store owners.

[pixy0stix]

When K-mart bought Sears, Nike pulled it's products out of Sears stores. They didn't want to be sold in a store that was considered lower class. One of the myriad of reasons I stopped buying Nike a long time ago.

www.nytimes.com/2005/05/05/business/media/05adco.html?_r=0

[Deleted]

I'm surprised this is just now making the news, because I noticed that a few years back, when I worked for a shoe store. It wasn't necessarily "urban," (my town is too small to have an urban/rural distinction, really) but we were definitely located in more low-income area part of town, because that's where the mall was. Nike started sending us less and less product, and then one day, a shipment contained nothing from Nike. The GM contacted them, and we received a similar response. He was like, "Uh, do you not realize most of our customers are buying your Jordans?" They weren't concerned, and now the store carries New Balance, Asics, and other lesser-known brands.

[redheadbaker]

Apr 13, 2013 13:09:49 GMT -5 iammalcolmx said:

I think the customers will travel to buy the shoes, however those poor shoe store owners.

I'm not so sure. At least in Philly, a lot of low-income residents rely on public transportation to get around. The way Philly's transit system is set up, that would require several transfers, extra fees for traveling to a different "zone," and service to the 'burbs is about once an hour, compared to once every ten minutes in the city. 

[josieposy]

Wow. That's messed up. Way to cut out some of your biggest buyers! Whose freaking strategy was this?

[KateAggie]

In my perfect world, these urban shoppers will throw up a big "Fuck You" to Nike and make some other brand top dog, because it seems to me that the urban shoppers help set the trends for the rest of us.

And lol that this is a non story. WTF?

[auntie]

Apr 13, 2013 9:57:45 GMT -5 summer said:

Apr 13, 2013 9:16:48 GMT -5 heyjude said:

This seems like a non story. Companies move product around all the time to meet business goals.

It's not like the word "Nike" = food or medical care. Because then we would really have a story.

It matters what stores or in your neighborhood and what stores/products choose not to be. And it matters whether or not you don't want certain communities associated with your brand. People in the hood notice the difference between the caliber of products in their neighborhoods vs the suburbs. It's lost on no one that they get left with off-brand, generic, 2nd/3rd rate knockoffs of everything from grocery stores, shoe stores, etc.

And it has economic implications for the neighborhood. The one guy says Nike is most of what he sells and if ge doesn't have Nike, he doesn't have a business.

This is absolutely a story.

It'll be interesting to see if they pull out of Modell's (a small regional sports chain) at the Gallery or at Franklin Mills. Most people in the city could access the Gallery at a base-fare. But it will have a big impact on the small businesses in the neighborhoods. These are the community members that support things like local sport teams and such.

[summer]

Apr 13, 2013 16:19:00 GMT -5 KateAggie said:

In my perfect world, these urban shoppers will throw up a big "Fuck You" to Nike and make some other brand top dog, because it seems to me that the urban shoppers help set the trends for the rest of us.

And lol that this is a non story. WTF?

I would love to see that, too. I think a number of people stopped drinking Cristal after they said they didn't want to be associated with "urban culture" aka the Blah people.

[Deleted]

Nike is a shit company that uses sweatshops and I have refused to buy their products for over a decade.

[Deleted]

People refusing to buy Nikes is the best thing that could happen - for everyone, everywhere. I'm shocked that people feel like Nike isn't playing fair - when have they ever played fair?

[epphd]

Bumping this up because it's another example of Nike's priorities being crappy. Sure, cut ties with Lance Armstrong. But Livestrong is a pretty stand up organization that itself has distanced itself from LA in the last few years. I actually like the NYT's take on Nike's line drawing.

www.nytimes.com/2013/05/29/sports/cycling/nike-to-cut-ties-with-livestrong.html?_r=0

[Deleted]

I feel like I've read this happening in other places, but for the life of me, I can't remember if it was Nike or another shoe brand. It was probably Nike and I'm just confused because I'm exhausted.

But dumb move, Nike.

I will never understand this business philosophy. Be it Nike, or A&F, or whoever. Why TF discriminate against people with money? If people can afford to buy your overpriced crap, why not sell it to them and laugh all the way to the bank?

Everyone and their mother has a Coach or Michael Kors purse in my neighborhood. I don't think it makes them any more or less exclusive (I haven't exactly studied their price structures), I just think it means to me, that they're selling well. Isn't that what business is all about?

[epphd]

WG - I just bumped this up from April to add the new link You're not losing it!

[vampsterdam]

May 29, 2013 0:05:10 GMT -5 @writergal49 said:

I feel like I've read this happening in other places, but for the life of me, I can't remember if it was Nike or another shoe brand. It was probably Nike and I'm just confused because I'm exhausted.

But dumb move, Nike.

I will never understand this business philosophy. Be it Nike, or A&F, or whoever. Why TF discriminate against people with money? If people can afford to buy your overpriced crap, why not sell it to them and laugh all the way to the bank?

Everyone and their mother has a Coach or Michael Kors purse in my neighborhood. I don't think it makes them any more or less exclusive (I haven't exactly studied their price structures), I just think it means to me, that they're selling well. Isn't that what business is all about?

But people want to feel like the purse they have is unique. Especially if you want to be considered fashion forward. You don't actually look hip when Great Aunt Sally is carrying the same purse (not my opinion, just repeating what I've heard). Personally, I'm indifferent with those brands, but I've seen a lot of people on GBCN post how they think those brands are "cheap" just because they are everywhere now (especially easy to get at an outlet store). People have even posted that they think designers ruin themselves when they create a more affordable line (I don't agree with that either). 

I guess my example is not about those designers being offered in lower class areas. I think people annoyed with the brands above are middle class and annoyed with other middle class people for "copying" and "ruining the brand". If that makes any sense.

[imojoebunny]

I think it is a dumb move for Nike. I haven't bought their shoes for years, and neither has my marathon loving DH, or anyone else I know who runs through shoes from athletic endeavors. Know your customer Nike.

I think they are well within their rights to stop doing business with people, but the reverse is generally true. Take Small Paul, they used to be exclusive, only available through mom and pop, now, they are in wide distribution through big box, and small, high end stores can't make money off them, so they look for the next cool thing. Getting rid of small mom and pops is a misguided ditch effort to try to rebuild a brand that is in decline. I give them a 50% chance of surviving for the next 20 years.

[housewife]

Personally, I think this is an attempt to fuck over mom and pop stores. No chance they pull out of Modells (who's Olney store is huge for them). The accounts are expensive to maintain and they make very little off the independent stores.

[Deleted]

May 29, 2013 11:40:34 GMT -5 vampsterdam said:

But people want to feel like the purse they have is unique. Especially if you want to be considered fashion forward. You don't actually look hip when Great Aunt Sally is carrying the same purse (not my opinion, just repeating what I've heard). Personally, I'm indifferent with those brands, but I've seen a lot of people on GBCN post how they think those brands are "cheap" just because they are everywhere now (especially easy to get at an outlet store). People have even posted that they think designers ruin themselves when they create a more affordable line (I don't agree with that either). 

I guess my example is not about those designers being offered in lower class areas. I think people annoyed with the brands above are middle class and annoyed with other middle class people for "copying" and "ruining the brand". If that makes any sense.

I totally get this and I've heard the same thing, which is maybe my comparison is probably apples and oranges.

It all just seems so stupid to me. Companies are in business to make money, yes? So selling your purses, shoes, and whatever, wherever you think you can make money is smart business. I guess I'm saying Coach and Michael Kors are smarter than Nike?

Either way, it's all so superficial and silly. And if designers are willing to leave money on the table, then their CEOs best hope they're making the right call. If not...

[Jermys]

We were in the hood at a shoe store last weekend (Freddie's aunt works there) and it was like over half Nike. I was looking for non-Nike running shoes, but didn't find much of anything.

[iammalcolmx]

I am wondering if Phila is the only Urban area they are doing this in? Walters in downtown Atlanta still has their account I believe. Nike will snatch your account quickly if you don't follow their rules. However since the response from Nike in this case didn't address any impropriety( like owners sells the limited shoes on EBAY for a shitton of money) then this could indeed be a clear case of discrimination.

[ttt]

May 29, 2013 12:20:20 GMT -5 @writergal49 said:

May 29, 2013 11:40:34 GMT -5 vampsterdam said:

But people want to feel like the purse they have is unique. Especially if you want to be considered fashion forward. You don't actually look hip when Great Aunt Sally is carrying the same purse (not my opinion, just repeating what I've heard). Personally, I'm indifferent with those brands, but I've seen a lot of people on GBCN post how they think those brands are "cheap" just because they are everywhere now (especially easy to get at an outlet store). People have even posted that they think designers ruin themselves when they create a more affordable line (I don't agree with that either). 

I guess my example is not about those designers being offered in lower class areas. I think people annoyed with the brands above are middle class and annoyed with other middle class people for "copying" and "ruining the brand". If that makes any sense.

I totally get this and I've heard the same thing, which is maybe my comparison is probably apples and oranges.

It all just seems so stupid to me. Companies are in business to make money, yes? So selling your purses, shoes, and whatever, wherever you think you can make money is smart business. I guess I'm saying Coach and Michael Kors are smarter than Nike?

Either way, it's all so superficial and silly. And if designers are willing to leave money on the table, then their CEOs best hope they're making the right call. If not...

But you can't charge $1,500 for a handbag that "everybody" has. Luxury companies like this would rather sell 10 $1,500 handbags than 100 $150 handbags. When you pay $1,500 for a handbag, you're not paying that much money for the materials and construction - a huge chunk of what you're paying is for the name and the exclusivity of it, the luxury of knowing that only the elite few have that same bag and that you're "special" for having it. If you sell too many of them, you dilute your brand and now you're just another one of the zillions of middle-market handbag manufacturers out there.

[zelda25]

May 28, 2013 23:30:22 GMT -5 epphd said:

Bumping this up because it's another example of Nike's priorities being crappy. Sure, cut ties with Lance Armstrong. But Livestrong is a pretty stand up organization that itself has distanced itself from LA in the last few years. I actually like the NYT's take on Nike's line drawing.

www.nytimes.com/2013/05/29/sports/cycling/nike-to-cut-ties-with-livestrong.html?_r=0

Nike stubbornly insisted on taking the wrong side of the Sandusky/Paterno fuckery for a painfully long time, too (which might explain their bungling of the Livestrong business).  Add the fact that the company (or Phil Knight, anyway) has entirely too much influence over the University of Oregon and, recently, the Oregon governor, and it's just one more reason on my list of reasons to not support them.

[msmerymac]

Apr 13, 2013 13:47:42 GMT -5 redheadbaker said:

Apr 13, 2013 13:09:49 GMT -5 iammalcolmx said:

I think the customers will travel to buy the shoes, however those poor shoe store owners.

I'm not so sure. At least in Philly, a lot of low-income residents rely on public transportation to get around. The way Philly's transit system is set up, that would require several transfers, extra fees for traveling to a different "zone," and service to the 'burbs is about once an hour, compared to once every ten minutes in the city. 

I couldn't even begin to imagine how to get to the KOP mall by public transit. I wonder if that's intentional.