Niketown is relocating to another space five blocks away (photo Bloomberg News)
When a store closes it usually arrives at the end of a lease. This is the same as a tenant in a home. Breaking a lease is a simple action with resounding consequences based on the cost. When a tenant breaks a lease they have to settle with the landlord by either paying out the lease or agreeing to terms that could be less.
Retail space in a Trump owned building can cost upwards of 130,000 a month. This means that Nike breaking its lease is probably costing the Swoosh a cool 5 million dollars plus. In the greater scheme of things that doesn’t sound horrible when you look at the gross of 32 Billion a year. However, when you look at the net of 4.2 Billion, 5 million is still a considerable amount to leave a prime real estate location in NYC.
According to Crain’s Nike’s move isn’t political, but let’s be serious Nike doesn’t ever do anything that isn’t a calculated move. The brand has finally bounced back in its share price to 60+ per share showing investor confidence is high and the move from Trump resonates with Nike’s ethics and with Nike’s athletes.