Nike and Foot Locker in dispute

The simmering feud between Nike Inc and Foot Locker Inc, Nike's biggest retailer, has taken a new turn. Foot Locker announced in a Securities and Exchange Commission filing on May 12 that it plans to reduce Nike orders in 2003 by US$300 million to US$400 million. The ongoing dispute made the front page of the Wall Street Journal on May 13. Foot Locker told Nike they were discontinuing stocking Nike's highest price models last Autumn and as a result, Nike have stopped supplying various other styles that Foot Locker wanted for their customers. Last September the shoe retailer announced plans to cut orders in 2003 by US$150 million to US$250 million. That announcement was preceded by a Nike warning to investors that it was experiencing order cancellations because of Foot Locker's strategic shift away from high to medium priced sports and lifestyle footwear. Foot Locker was responsible for 11% of Nike's worldwide revenue in fiscal 2002. In a move that was characterised as retaliatory, Nike announced in early December that it would not let Foot Locker in on the release of the highly priced Air Jordan Retro line. In response to Foot Locker's earlier announcement of reduced Nike orders this year. Wall Street reacted quickly and, in Nike's case, harshly to the news. Nike stock closed down US$1.53 to US$42.70. Foot Locker's stock fell 40 cents to US$12.12 a share.