HOFFMAN ESTATES, IL: Newly created Sears Holdings suffered its first image blow last week when Nike said it would no longer sell its products to Sears.
Nike positioned the decision as a routine one, saying in a statement to Reuters that "this was a brand decision following a routine account review and the recent expiration of Nike's agreement with Sears." But news reports quickly opined that the move was prompted by Nike fears that its upscale sneakers would be sold in Kmarts.
Since the March merger of Sears and Kmart into the new Sears Holdings, Sears has been moving brands such as its Kenmore appliances into Kmarts.
The Nike decision might cause other brands to reconsider supplying Sears, said Eric Yaverbaum, president of Jericho Communications.
"Sears needs brands like Nike [for] its strategy," he said. The decision amounts to "Nike saying they don't trust [Sears chairman] Eddie Lampert, and they don't know where those stores are going, and why take a risk?"
Fred Marx, a partner with extensive retail experience at Marx Layne, Farmington Hills, MI, said Nike made the right decision to protect its brand integrity.
Neither Sears nor Nike returned requests for comment.