Last week, Nike announced that beginning May 31, 2022, it would stop working with Israeli retailers to market its products. Though some people jumped to conclusions, assuming that the decision was politically motivated, the truth is much more simple.
The announcement was made via a letter to its 15 retail store owners across Israel:
“Following a comprehensive review performed by the company and considering the changing marketplace, it has been decided that the continuation of the business relationship between you and the company does no longer match the company’s policy and goals.”
Many assumed the decision was based on political interests as part of the Boycott Divestment Sanctions (BDS) movement. One such claim was made by the British news service, The Independent, who implied a political motive by omission. The story, written by Olivia Petter, inaccurately claimed that Nike had declared its intention “to terminate sales in Israel as of next year.”
The article stated that “the decision follows the announcement that ice cream company Ben & Jerry’s Ice Cream would end sales in the Occupied Palestinian Territories,” implying a connection between the two decisions.
The correction was noted by Honest Reporting, a media watchdog, which clarified that Nike’s decision was not, in fact, politically motivated. Honest Reporting cited an article in Quartz magazine in June 2021 observes:
“The shift is part of a strategy Nike announced in 2017 called the ‘consumer direct offense.’ A key element entails increasing Nike’s own sales to shoppers through its own immersive stores and digital channels, notably its suite of apps, including SNKRS, where it launches limited release products. Direct sales tend to have better margins since there’s no middleman taking a cut.”
Hi @Oliviapetter1, why have you published #FakeNews?@NikeStore is ending sales to small, independent retailers so as to *focus on sales in their own outlets*, including their brand new “Hall of Innovation” in Tel Aviv (joining NYC, Paris, Shanghai). https://t.co/uZqI2zmqqv pic.twitter.com/x7wmUESuYS
— Daniel Laufer (@lauferdaniel) October 8, 2021
The article in The Independent was amended to clarify this point.
As part of this sales-oriented change in policy, Nike ended its relationship with Amazon in 2019, a Nike explained by claiming “it can earn much higher profits and control its premium product experience by managing the entire sales process itself.”
An article in J-Post noted that the new policy is expected to hurt profits of the Israeli Nike stores. The article suggested that some Nike retailers in Israel may opt for parallel imports, receiving Nike products from independent suppliers, but that would raise prices.