As it seeks to navigate a bruising retail environment and possibly responds to

pressure from rivals, Nike has changed how U.S. retailers price its products.

The sportswear giant will let retailers advertise 25 percent discounts on Nike
merchandise year round.

"They decided a couple years back to allow retailers to advertise at 25 percent

off for a fixed number of weekends," said NPD Group industry analyst Matt
Powell. "In December they changed the rule and essentially said retailers can
advertise 25 percent off anything."

Nike declined to confirm details or comment on specifics, but said in a

statement the change to its minimum advertised price, or MAP, simplifies its
account for retailers. It's a tough retail landscape. As more consumers shop
online, many of Nike's traditional brick-and-mortar retail partners, such as
Kohl's, have suffered from declining foot traffic.

Others, such as Sports Authority, have gone out of business. Bloomberg this
month reported the U.S. could set a record this year for retail store closures.

"Given the depth and breadth of the Nike product line, we routinely review our
MAP and last year we simplified the policy," Nike said, in the statement. "The
policy will continue to dictate predetermined times when retailers can
advertise specific products and the lowest allowable advertised discount price.
In all cases, however, our retail partners remain free to determine price at
point of sale, whether at the cash register or in the online shopping cart."

While Nike declined to discuss specifics, Powell said the change applies to
footwear and apparel with some exceptions. The change explains the recent
increase in advertisements for heavy discounts on Nike products in Sunday
newspapers and circulars.

"It's made for a much more promotional market already," Powell said.

The change also comes as Nike has lost some momentum as consumers have
flocked away from its expensive sportswear to the more casual athletic apparel
of rival Adidas.

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Wall Street analysts, some of whom were unaware of the change, called it
significant, and viewed it as a response to gains by competitors, especially
the resurgent Adidas.

Camilo Lyon, managing director of equity research for Cannaccord Genuity,

called the change a "big statement" that indicates either "A, an urgency around
recapturing lost market share at the expense of gross margin or B,
incrementally putting the pressure on competitors like Under Armour. From a
defensive perspective, maybe this is the way they feel they can best compete
with the momentum Adidas has."
Analysts worry about excessive discounting.

"I would be a little nervous about retailers being able to offer 25 percent off on
a regular basis," said Edward Jones consumer research analyst Brian
Yarbrough. "This tends to train the consumer to wait for the discounts, which
hurts full-price selling. First, it is very difficult to back away from that mindset
once you move forward as a brand because consumers don't want to pay full
price any more. Second, I think it hurts the health of the brand longer term.
The only benefit for Nike is it will help drive sales but these are not healthy
sales."

Nike had $10.6 billion in sales to North American wholesale customers in its
most recent fiscal year, accounting for 33 percent of its $32.4 billion in
revenue. The North American marketplace is Nike's most important, with
$14.8 billion in fiscal 2016 sales, 46 percent of Nike's top line.

It's unknown how long Nike will keep the new policy.

"The longer this persists the more the consumer comes to expect it and the
harder it is to reverse," Lyon said. "But this could be a bridge to when the
company has a stronger suite of products and could demand more full price."

On the company's last conference call, CEO Mark Parker said Nike is on the
verge of a "cushioning revolution" that includes four significant new sole
technologies. The products could ramp up demand for Nike footwear.

"We know a loaded innovation pipeline is what ignites our next phase of
growth over the long term and there's plenty ahead," Parker said on the call.