Nike's Termination Notice Triggers Historic Plunge for Top Sports Retailer

Shares of China's largest sports brand retailer, TOPSPORTS (06110.HK), tumbled nearly 30% intraday today, hitting a record low. The sharp decline was triggered by a formal notification from Nike that it will terminate the company's online sales authorization in mainland China effective early 2027, sending shockwaves through the market.

Nike's Notice Delivers Heavy Blow

TOPSPORTS issued an announcement early on July 22, stating it had received the formal notice from Nike. The group's authorization to sell Nike products on online platforms in mainland China will be fully terminated starting January 1, 2027.

In the announcement, TOPSPORTS acknowledged that for the fiscal year ending February 28, 2026, revenue from online platform sales of Nike products contributed approximately 22% of the group's total revenue. This termination is expected to have a significant negative impact on the business in the short term.

Driven by this news, TOPSPORTS's stock price plummeted over 30%, with its total market capitalization shrinking substantially to reach its lowest level since listing.

In reality, market rumors about Nike's intention to adjust its channel strategy had emerged as early as mid-June, at which point TOPSPORTS's stock price began to face pressure. Despite TOPSPORTS urgently issuing a clarification announcement stating it "discusses business cooperation with Nike from time to time," it ultimately failed to prevent this negative development from materializing.

Performance Under Pressure, Store Closures Continue

Operational data for the period from March to May 2026, also released by TOPSPORTS on the same day, showed a year-on-year decline of 10% to 20% in total retail and wholesale sales value for the quarter. The gross sales area of directly operated stores decreased by 2.9% compared to the end of the previous quarter and by 11.2% year-on-year, indicating the continuation of store closure and downsizing efforts.

Financial results for the fiscal year ending February 2026 revealed that TOPSPORTS's revenue for the period was 25.74 billion yuan, a year-on-year decrease of 4.7%. Net profit attributable to shareholders was 1.267 billion yuan, a slight decline of 1.5% year-on-year. Both revenue and net profit were below the levels achieved in the pre-listing fiscal years of 2018 and 2019.