The decision by Nike to stop selling its products in Britain is a significant blow to the brand’s global reputation and its global brand value.
The retailer has been a UK-based company for more than a decade, but the move to stop sales in the country was announced on Thursday, just hours after it was announced that it would not be selling its iconic sports and fashion products in the UK.
The announcement has raised eyebrows, with analysts warning that the decision will affect Nike’s ability to build brands overseas, which will have an impact on its bottom line.
It has been said that Nike could face a $1bn loss as a result of the decision, according to analysts at IHS Markit.
In a statement to The Sunday Times, the company said it was “disappointed and saddened by the announcement that the UK Government has decided not to renew the licensing agreement that was agreed between the UK and Nike”.
“It is our understanding that the government is not seeking to impose tariffs or other restrictions on our supply to the UK, which is a critical part of our business,” the statement said.
“We have a good relationship with the government and look forward to continuing to work with them in the future.”
Nike, whose UK headquarters are in Oxford, has had a strong presence in the English capital since it opened its first store in 2007.
A year later, it opened a second store, in Coventry, with a number of other retail partners, including Tesco and Marks & Spencer.
Nike has been criticised by some campaigners for its role in the rise of the alt-right in Britain, with the brand now being the target of an online campaign.
While Nike’s UK operations are not affected by the Brexit decision, the brand is not expected to be re-established in the capital for some time, with some analysts warning it will be a “huge loss” for Nike’s business in the city.
Analyst at BMO Capital Markets Peter Boulter said: “The timing of the announcement, and the timing of this announcement, is a big disappointment for Nike.
It’s the latest sign that the company will have to rethink its strategy.”
He said the decision to stop British sales was “hugely disappointing”, adding: “I think it will hurt Nike’s bottom line, which means it could suffer a $9bn loss for the next 12 months.
Boulter warned that it could also affect Nikes reputation in the U.S.
Airlines have been urged to re-examine their plans to fly the Nike logo in the United States and other countries after the UK’s decision.
Last year, the airline Virgin Atlantic said it would stop flying Nike products from next year in a move it said was aimed at “reducing our exposure to the world’s largest sporting brand”.
However, Nike has been able to make a good profit through its relationship with British Airways, with profits at the retailer reaching a record $2.2 billion in the first nine months of this year.
However it has faced criticism over the sale of its products to the Unearthed brand, which it sold in the past for $8.6 billion.
Virgin Atlantic said: ‘The sale of Unealed to Virgin America in 2014 was part of an integrated strategy to deliver high-quality, low-cost global supply to our global partners.
The sale of this brand to Uneated and Virgin America, and other Uneased brands, will create significant synergies and increase our global supply chain.
‘The Uneaked brand is a brand of high quality and value that is not only relevant to our customers in the US, but also across the globe.’
Airline chief executive Michael Richards said in a statement that Nike’s decision “is a huge loss for our brands”.”
Nike’s global brand has become synonymous with quality, integrity and sustainability,” he said.”
Nikes brands have been at the heart of the company for many years, but it is important that we are able to maintain and grow the relationships that have grown to become such an iconic brand.
“Meanwhile, US-based clothing company Stella McCartney has announced it will stop selling Nike shoes in the fall.