Sports Direct Demands Probe Into Nike and Adidas Dominance

Sports Direct is calling for an investigation into major sportswear brands such as Nike and Adidas.

The U.K.-based retailer, led by British billionaire Mike Ashley, has demanded a probe of the companies’ dominance in the athletic market in a statement issued Monday.

Noting a Sunday Times article titled “Nike’s killer blow for small stores,” Sports Direct wrote that the industry has long been monopolized by “‘must-have’ brands such as Adidas,” which “holds an extremely strong bargaining position vis-à-vis the retailers within their supply networks.” The statement added that such brands “use their market power to implement market-wide practices aimed at controlling the supply and ultimately the pricing of their products.”

Those practices, wrote Sports Direct, include so-called “segmentation” policies that restrict the range of products available to retailers, as well as withdrawing product supplies and even refusing to supply such merchandise.

“Sports Direct believes that the industry as a whole would benefit from a wide market review by the appropriate authorities in both the U.K. and Europe,” the company said.

The note comes in light of reports — including the Sunday Times article — that Nike plans to sever within two years its supply deals with dozens of independent retailers as it seeks to take greater control of its own distribution. The Sunday Times story added that retailers were “fearful” Adidas would follow in Nike’s footsteps.

In the statement, Sports Direct explained that it has previously fought back against the two athletic giants. In 2013, Adidas was said to have withdrawn its stock of replica Chelsea FC football shirts from Sports Direct’s stores — “simply refusing to supply key products at all with no apparent justification,” claimed the retailer.

Nike responded in a statement to FN, “Nike continually evaluates the marketplace and competitive landscape to understand how we can best serve consumers. As part of this, from time to time we do make adjustments to our sales channels, in order to optimize distribution.”

Separately, Adidas wrote to FN, “The consumer is at the heart of our strategy and everything we do has the objective in mind to even better serve our consumers. In an increasingly digital marketplace, the consumer decides where to go for information and where to purchase. We want to enable seamless consumer journeys. A strong partnership with retail partners is important to reach this objective.”

This story has been updated with comments from Nike and Adidas.

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