Nike cuts ties with several local stores

Earns Nike
A pair of Nike Air Force One lows is pulled out of a box for a customer in Denver on Saturday, June 23, 2007. Nike Inc. is expected to release quarterly earnings on Tuesday, June 26, 2007.(AP Photo/David Zalubowski)

Nike is giving the boot to several small, local retailers. Without explanation.

CBS3 first reported Friday afternoon that the athletic wear company told select area stores that as of June 30, their accounts are being cut off. The reason why remains unclear.

Business owners throughout the Philadelphia and Camden regions have received emails from the sporting apparel and footwear company saying that the retailer is "exercising its right to terminate your accounts." It's unknown whether Nike is taking the same approach with stores in other cities.

Keith Sherman, store manager of the three Real McCoy Athletic Footwear locations throughout the region (in Olney, on Cecil B. Moore Avenue and in Camden), says Nike products account for 75 to 80 percent of his store's sales. "Those numbers are staggering," he said over the phone Friday.

Even more mysterious is the manner in which Nike is handling the situation.

"We had scheduled a meeting at the Nike Headquarters in Portland, Oregon with our sales rep," Sherman said. "And that meeting was canceled that day — they wouldn't even see us," he added. The account termination email arrived in store owner William Chung's inbox shortly after the canceled meeting in Portland. The notice listed "no reasons whatsoever" as to why Nike was severing ties with the shop. Sherman says Real McCoy Athletic Footwear has been doing "good business" with Nike for over 23 years.

Currently, small "mom-and-pop" shops like Top Shoes, Center City Sports and Shoe Plus are among the only known stores affected.

Nike said in a statement released to CBS3:

“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.”

Nike did not return our request for comment on Friday. More to come.

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