Nike Teams Up With FogDog
In a joint announcement today, Nike and Fogdog Sports entered into a strategic relationship that will allow the leading Internet sporting goods retailer to purchase and sell Nike products online in the United States beginning with the 1999 holiday season.
Representing another step in its unfolding Internet strategy, Nike chairman and CEO Philip H. Knight also disclosed that the agreement includes a provision that Nike will take a minority equity position in Fogdog. Specific financial terms of the transaction can be obtained at http://www.freeedgar.com.
Among the significant features of the agreement outlined by Nike's Phil Knight and Fogdog Sports CEO Tim Harrington include:
Fogdog will be granted benefits similar to those afforded to Nike's important "brick and mortar" retail accounts.
Nike's first, and, for a limited period of time, only endeavor with an "online only" retailer that involves a collaborative approach to selling on the Internet.
Customer service training on the Nike product line for Fogdog personnel to enhance the on-line shopping experience for customers seeking Nike products.
"The agreement with Fogdog is a reflection of our common goals - love of sports, performance products and a high level of customer service and intimacy," says Knight. "Just as Nike Air technology changed footwear, Fogdog is changing Internet retailing for sporting goods."
"I believe all brands in our industry need to embrace this channel to allow the consumer to make a choice in their preferred shopping method. The business principle, 'innovate or die' has never been more applicable to commerce than it is in today's online environment. This is just a first step in an evolving strategy to take an aggressive leadership position in this exciting new medium."
Harrington agrees that the Nike-Fogdog partnership is innovative and mutually beneficial. "The best of the Web are born on the Web," explains Harrington. "I am delighted that Nike has recognized us as such. This partnership with Nike will help us achieve our goal of being the leading Internet retailer of sporting goods."
The new agreement is not expected to impact Nike.com, Nike's own Web site that attracts youth and sports enthusiasts seeking detailed information about athletes and technical performance data about products. Nike will continue investing in nike.com, maintaining its sports category product focus and stimulating visual presentation.
Mary Kate Buckley, vice president and general manager of nike.com, stated that she believed the two sites could coexist because of their different missions. "The Fogdog partnership should be viewed as another important distribution channel-not as a replacement for nike.com or brick and mortar stores. Nike.com sales are brisk and lots of customers are using the store locator function on the site after equipping themselves with product information."
Although Fogdog.com is currently offering a limited amount of Nike products for sale, Nike has committed to dedicate a sales and technical team to ensure that Fogdog will be well equipped to sell a wider variety of Nike footwear, apparel, equipment and accessories.
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