SHANGHAI, Nov 10 – Nike is closing older stores, introducing sport-specific formats, and streamlining online distribution in China, as the US sportswear giant steps up efforts to turn around its business in China — one of its most important markets.
The company is shifting away from smaller, general-purpose stores toward specialized formats catering to runners, basketball players, and outdoor enthusiasts, Cathy Sparks, vice president and general manager of Nike Greater China, said in an interview during the ninth China International Import Expo in Shanghai earlier this month.
“We have thousands of relatively small multi-sport stores that are no longer representing the best of our brands,” Sparks said. “We’ll be shutting those down and then reopening stores that are more focused on a specific consumer and the sports that they love.”
The overhaul follows another challenging quarter for Nike in China, where revenue fell 26 percent on a currency-neutral basis in the first fiscal quarter that ended Aug 31.
Nike began laying the groundwork for its restructuring in July, announcing plans to streamline its digital distribution network in China and improve the quality of online sales.
In early October, the company followed with a broader organizational restructuring, bringing its China business into a combined Asia-Pacific and China leadership structure to strengthen regional collaboration and restore growth.
The changes come as Nike faces intensifying competition from international and domestic sportswear companies — including Anta Group and Li-Ning — while Chinese consumers have become more selective about products, pricing, and shopping experiences.
A central part of the overhaul is Nike’s digital business, where the company plans to introduce major changes in January 2027. It aims to consolidate a network of roughly 2,000 online distribution points into a more focused presence built around flagship stores on Tmall, JD.com, and Douyin.
“We’ve done a lot of studying on what migration we can expect from the 2,000 current points of distribution across digital,” Sparks said. “We know all of that distribution isn’t necessarily helping.”
The company is developing new digital shopping experiences designed to make product discovery and purchasing easier, with more focused and engaging online storefronts.
The restructuring is intended to strengthen Nike’s control over product presentation, reduce fragmented distribution, and support full-price sales — even if the transition initially weighs on its online reach.
“It’ll be different in the beginning, but we expect over time we’ll be able to build back and even grow our digital footprint,” Sparks said.
Nike plans to establish more focused online destinations for its namesake brand, Jordan, and children’s products, alongside dedicated offerings for running and basketball. Its outdoor brand ACG is also scheduled to open an exclusive flagship store on Tmall in the spring of 2027.
The strategy marks a shift from maximizing distribution to improving the quality and profitability of sales in a more disciplined marketplace.
Nike is pursuing a similar approach across its physical retail network. It is replacing older stores that no longer meet changing consumer expectations with more specialized formats offering deeper product assortments and sport-specific experiences.
The company will reopen a reinvented Nike Running store on Shanghai’s Xinle Road on Nov 27. The store will combine product innovation, running expertise, training, and community activities tailored to local runners. It will be followed by Jordan Zhangyuan, a community-focused pop-up concept, in January 2027.
Three new ACG Base Camp stores are also scheduled to open in January in Tianjin, Chengdu in Sichuan province, and Ningbo in Zhejiang province. The stores will cater to consumers interested in outdoor activities and sport-inspired lifestyles.
Sparks said Nike would first develop and test new retail concepts through its directly operated stores before expanding successful formats with retail partners.
“We don’t want to ask our partners to invest in something that we’re not really confident in,” she said. “We test and we perfect and then we’ll scale.”
The strategy is also aimed at making Nike’s retail network more responsive to different consumer groups, rather than relying on a uniform store model across the country.
An early sign of demand for more targeted retail concepts has emerged from NikeSKIMS, Nike’s activewear collaboration with shapewear brand SKIMS.
Sales at its Shanghai retail location have exceeded initial expectations by more than threefold since opening in late September, Sparks said, while online demand has also remained strong.
“We’ve tripled our expectations,” she said. “It’s done more than three times what we thought we could do during that time.”
The stronger-than-expected performance has prompted Nike to consider expanding NikeSKIMS into other Chinese cities, including Beijing.
The company is also working with its global partners to adapt the collection to Asian consumers, including adjustments to sizing, garment lengths, and sports bras. The changes are expected to be introduced over the coming seasons.
Beyond retail and distribution, Nike is investing in local product development to respond more quickly to changing consumer preferences.
The company has established a China Local Creation team led by Flavia Cervantes, vice president of local creation, who recently relocated to Shanghai.
Its first collections, Nike Shifted Utility and Jordan Tailored Sport, combine performance materials with designs and fits tailored to Chinese consumers.
The initial collections will be sold through selected physical stores, allowing the company to gather consumer feedback before expanding distribution to digital and retail channels.
Cervantes said the collections were developed in close collaboration with Chinese manufacturers, significantly shortening the product development cycle.
The first local creation project was completed in about 120 days, according to Sparks.
“We basically did one round of prototypes and that was it, because our factory partners are so good at what they do,” she said.
Cervantes said the proximity of Nike’s Shanghai design team to local factories and material suppliers allows designers to work directly with manufacturers on fabrics, construction, and fit.
“Here in Shanghai, we can hop on a train and go out to the factory,” she said, describing how the team collaborates with suppliers to refine products and accelerate development.
Closer collaboration with manufacturers also allows Nike to adjust production more quickly in response to consumer demand.
Sparks said the company is expanding its use of data analytics and artificial intelligence to forecast sales and work with manufacturing partners to increase or reduce production as market conditions change.
The approach is intended to limit excess inventory, protect pricing, and support full-price sales.
“If we learn that maybe our plan was a little bit too big, we can respond and we don’t make the extra units,” she said.
Nike is also positioning China as a launch market for global innovations.
At the CIIE, the company unveiled plans to extend its Radical AirFlow innovation platform from apparel into footwear, including the ACG Pegasus Trail and Nike Pegasus Plus 2, both expected to launch in China in June 2027.
The company is also developing products for local sporting needs, including the Swooshfly racing shoe aimed at first-time marathon runners in China. The shoe is scheduled to debut in February 2027 at a more accessible price point.
The new retail formats, streamlined digital distribution, and locally developed products reflect Nike’s efforts to build a more responsive and profitable business in China. The challenge will be turning those investments into a sustained recovery in sales and profitability amid intensifying competition.
“We’re so committed to reimagining what our brands can be in China,” Sparks said. – China Daily
