Shares in several major US sports chains hit 52-week lows on word that Nike Inc might soon be selling its gear directly through Amazon.com Inc.
Goldman Sachs Group Inc on Wednesday said it believed the deal would give Nike better exposure to Amazon’s huge retail channel and customer base, especially millennials.
Nike goods can already be found on Amazon subsidiary Zappos.com, and its shoes and gear can be found through third-party sellers on Amazon.com.
Goldman believes the deal would give Nike better control of its brand’s presentation on the site.
However, investors mostly saw the gravitational pull of Amazon, sending shares of Dick’s Sporting Goods Inc, Hibbett Sports Inc, Big 5 Sporting Goods Corp, Finish Line Inc and Foot Locker Inc plummeting between 5 percent and 7 percent on Wednesday.
It is the third sector in less than a week that has been ravaged over fears that Amazon would soon become a disrupting force.
Amazon on Friday last week said that it would buy Whole Foods Market Inc for US$13.7 billion, pummeling shares of grocers such as Kroger Co.
Retail clothing companies, already in danger as people increasingly shop online, or just elsewhere, took a dive on Tuesday when the online behemoth announced its Amazon Wardrobe program for members of its Prime program.
Wardrobe essentially creates a dressing room at home, allowing customers to order clothes with no money up front, keep them for a week and send whatever they do not want back in a resealable, postage-paid box.
Deep hurting felt by those sectors spread to sports chains on Wednesday on the Goldman Sachs report.
However, it does not take much to spook investors in the sporting goods sector. The years since the 2008 recession have not been kind. Sports Authority Inc, MC Sports, Sports Chalet and Eastern Outfitters have all filed for bankruptcy since then.
Those that remain are hoping a sector consolidation will ease competition. The sale of Nike goods on Amazon.com is unlikely to make anything easier for sports retailers.
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