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Why The Nike Shop Inside of JC Penney Helps JCP

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Recently, JCPenney announced that it is featuring designated Nike shops within more than 600 of its stores. These 500 square feet areas will be located within the men’s section as it looks to bolster its active wear offerings. These small stores ensure that Nike stands out in mass retailing.

Source: Nike To Benefit From Opening Stores Within JCPenney Locations

In the last week writers have been stating that JCP opening Nike stores within their locations is great for Nike.

Wrong

Nike doesn’t need JCP. Nike has built an infrastructure for delivering their product direct to consumer and the dividends are paying off. The brand saw a rough 2016 as Wall Street failed to understand how Nike was setting itself up. I repeated over and over on this site that DTC was more important than Futures. http://www.arch-usa.com/?s=DTC

What’s Important in the Nike/JCP deal?

This is what is is more important JCP operates about 1000 stores. Many of those stores are currently on the chopping block. In 2007 JCP hit its peak share price of 82. This was the highest share price it had since 1972 when the company became publicly traded. In 2014 after a botched rebranding by a former Apple exec the company hit 5/share. As JC Penney announced their opening of Nike stores inside of their spaces, their shares have risen back to 6.36.

Does Nike need JC Penney?

Not really. Nike has over 900 store locations and they are opening more locations. Nike is maintaining relationships with retailers to continue their reach into the market via every channel. A company that isolates itself by cutting off wholesale is cutting off streams of revenue.  You can never reach every customer and brand alliances are critical. Also the bankruptcy of The Sports Authority lingers. Nike doesn’t really need JCP, but the same isn’t true for JCP.

The author of the Source link states that Nike will benefit from JCP… not exactly and I’d expect a Forbes writer to be smarter.