Why Nike Is Canceling Orders & What’s Really Going On – Footwear News
Update: Nov. 24, 2021 at 4:45 p.m. ET
Nike has responded to FN’s request for comment with an email statement.
“We continue to work with our suppliers and retail partners to support their efforts in response to the unprecedented nature of COVID-19 and supply chain constraints. While we all continue to experience global supply chain disruption amidst the ongoing pandemic, Nike remains focused on providing distinctive service to consumers and partners over the holidays. We are confident in Nike’s ability to navigate these temporary impacts,” the company wrote in the email.
What We Originally Reported
Nike has cancelled product orders to at least one retail store until the summer ’22 season, according to analysts and reports, and it’s unclear how many other stores could be impacted.
The athletic giant wrote in an email to a sneaker retail partner that the products that had not yet been shipped to the store would not be fulfilled, Complex reported late Tuesday. In the email, which was tweeted out by Brendan Dunne of Complex, the brand said that all orders though summer ’22 to that retailer, which was not named, would be cancelled due to complications from supply chain delays.
“COVID-19 continues to impact the global supply chain and create transportation disturbances,” the email read. “As a result of this dynamic and unprecedented situation, we regret to inform you that Nike Futures orders in SP22, SU22 and the balance of HO21 will be canceled.”
The email continued, “This means any HO21 orders that have not yet shipped will not be fulfilled, nor will any orders for SP22. In addition, due to these same supply chain challenges, Nike will not offer At Once orders until further notice.”
The NPD Group Inc. senior sports industry advisor Matt Powell confirmed to FN that he had heard from about half a dozen independent shoe stores that the same situation happened to them. However, shortly after, Powell said Nike backed away from what was revealed in the reported email to at least one of these stores.
“Now I’m being told that Nike retracted emails saying stores had futures cancelled. Very strange,” Powell wrote on Twitter today.
FN has reached out to Nike for comment.
One retailer, who spoke under the condition of anonymity, told FN that given the supply chain backlog, communications such as this are not unusual.
“Supply chain issues are likely to be a big disruptor in the short term. We have felt it on a few levels already from every brand. We’ve been told about delays and shortages since early October. Feeling some delays, not much cancels yet. Nike is generally very good at getting ahead of problems,” the retailer said.
Williams Trading analyst Sam Poser said that the original retailer who received the letter was likely a small wholesale account that was upset and “sent out the email to stir the pot.” Poser added that after checking in with other accounts, it appears that larger retailers that sell Nike products were not impacted by this problem.
“Based on recent commentary from Dick’s Sporting Goods and Foot Locker, as well as other checks, orders are being honored to the best of Nike’s ability,” wrote Poser. “However, Nike is closely monitoring sales at its wholesale accounts, and then offering targeted product, with at-once availability to the retailer or retailers that Nike deems worthy.”
One such worthy retailer might be Dick’s, which leverages an existing supplier relationship and a new digital partnership with Nike. Supply chain issues aside, Nike has recently terminated its wholesale accounts with various retailers such as Zappos, Dillard’s, DSW, Urban Outfitters and Shoe Show.
“Dick’s is on the good list of most, if not all, key vendors,” said Poser in another note. “As such, Dick’s is getting key product well in a more timely manner than competitors, and will continue to do so into 2022.”