Nike's new partnership with Amazon will allow the footwear maker to sell a limited assortment of its products on Amazon's website. Fred Katayama reports.
Investors excited about Nike's new partnership with Amazon, driving its shares higher at the market open Friday. Nike said Thursday it's launching a pilot program to directly sell a limited assortment of its shoes and other products on Amazon's website. The world's largest footwear maker decided to take that route instead of selling through third-party and unlicensed dealers. Goldman Sachs says that could beef up Nike's revenue by up to $500 million. That's about one percent of global sales. Facing intense competition at home, Nike earlier this month embarked on a restructuring program that cuts 2 percent of its workforce and kills a quarter of its shoe styles. Nike also reported rising revenue and profit, both of which beat Wall Street's estimates. But Cowen analyst John Kernan said, "We continue to prefer 'outperform'-rated Adidas over Nike .. with higher growth and margin expansion prospects through 2020." Nike shares have risen just 4 percent this year, vastly underperforming Adidas' 12 percent gain.