Nike’s CEO says the focus on its own website and stores has gone too far, re-embracing wholesale sellers

Nike CEO John Donahoe admitted Friday that the company has strayed too removed from wholesale partners like Macy’s AND DSW in a bid to turn out to be a retailer that sells goods to customers primarily through its own stores and website.

“We know that in our move toward digital, we’ve moved away from wholesale a little bit more than we intended,” Donahoe told CNBC’s Sara Eisen in Paris. “We fixed it. We invest heavily in cooperation with our retail partners. Everyone has been here over the last few days and is very excited about the innovation plan.”

Over the past few years, Nike has worked to remodel its business from a brand that primarily sold sneakers and apparel in department stores and sports specialty stores to at least one that directs the majority of its sales on to consumers.

This strategy allowed Nike to earn significantly more on sales and gain greater insight into its customers through data collection. Donahoe said Nike has tripled its mobile and digital business over the past 4 years from about 10% of total sales to 30%.

However, it is a difficult technique to implement and may put pressure on margins in the short term. The move to a direct model is capital-intensive and burdens Nike with returns and inventory issues that typically fell to wholesale partners.

Moreover, department stores and specialty stores are powerful drivers of customer acquisition. Without them, brands must spend more on marketing, which has turn out to be costlier and difficult on the Internet.

Some analysts said Nike’s decision to avoid wholesale partners was a mistake. They argued that this has set the company back and is certainly one of the reasons it has fallen behind in innovation and products. It also had a negative impact on Foot Locker, which has long relied on Nike to drive sales and currently doesn’t receive the same product mix it once did.

In pursuit of a direct model, Nike has temporarily cut ties with retailers comparable to Macy’s AND DSWbut last 12 months it reinstated those partnerships because it began to vary its tone toward wholesalers.

The change comes at a difficult time for Nike, which has faced criticism over its product mix and lack of market share to start-ups comparable to On the run and Hoka. In December, it announced a broad restructuring plan geared toward cutting costs by about $2 billion over the next three years. It also lowered its sales forecasts, warning of weaker demand in the coming quarters.

Two months later, Nike said it was cutting 2% of its workforce, or greater than 1,500 jobs, to speculate in growth areas comparable to running, women’s and the Jordan brand.

During Friday’s interview, Donahoe reiterated that today’s consumers “want to get what they want, when they want it, how they want it,” a refrain he has used over the past 12 months when discussing Nike’s evolving sales strategy.

“There are no digital shoppers and no in-store shoppers. There are no single-brand shoppers and no multi-brand shoppers,” Donahoe said. “Consumers need to get what they need through multiple channels. The consumer can have the selection: contact Nike directly digitally, stand in front of Nike’s doors or go to certainly one of our wholesalers [partners]”