Asics Terminates Retail Partnerships With Small UK Stores
Asics is cutting ties with some independent retailers, following the lead of brands like Nike, Adidas and Crocs that are prioritizing direct channels and high-value retail partners.
The Japanese footwear manufacturer has recently terminated its supply to various retail partners in the UK, the brand confirmed to FN.
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“Recently, we reviewed the partners we worked with in the UK. Our goal is to ensure we provide the best support to all our partners, and unfortunately, we can’t provide that support everywhere and to everyone. As a result, we have had to make the difficult decision to cease supplying ASICS products to a number of UK businesses,” the brand said in a statement.
Asics added that it still works with independent retailers across “several hundred stores” in the UK.
According to a report in The Guardian, this exit occurred at hundreds of small stores in the UK. And some larger stores were terminated via emails last month, the report noted.
“As a business, ASICS is partner focused. A diverse and varied retailer base of small to big partners is an integral part of our strategy and key to our future,” Asics said in a statement. “We prioritise our partner’s business over our own direct channels. This is because we believe our partners can add tremendous value and expertise to ensure people are moving in the right sports gear.”
The move follows a similar pattern at other retailers in the U.S. In recent years, major brands like Nike, Adidas, Crocs and Hey Dude have exited multiple wholesale partnerships to focus on their owned channels and high-performing retail parters.
Despite the trend, a 2021 report from BMO Capital Markets analyst Simeon Siegel noted a possible downside to the retail industry trend of brands nixing partnerships with different wholesalers to focus on key accounts and direct-to-consumer channels. That is, direct channels can often yield lower profit margins than wholesale channels before taxes and interest
Asics reported its highest-ever quarterly sales on record in the first quarter of 2023 as business in Asia rebounds after multiple COVID lockdowns. Net sales in the first quarter increased 44.6 percent to 152.2 billion yen ($1.13 billion based on current exchange rate) compared to 105.3 billion yen ($780 million) the same time last year.
By category, net sales at Asics’ performance running division increased 32.6 percent to 77.9 billion yen ($580 million) due to strong sales in all regions. The company’s core performance sports category saw net sales jump 122.4 percent to 22.7 billion yen ($170 million), while net sales in sports style rose 90.8 percent to 15.4 billion yen ($110 million).
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