(Yicai) July 22 -- Topsports International Holdings' shares plunged after Nike said it will reclaim its online distribution rights in China as part of an overhaul aimed at reviving sales in its second-largest market, ending the long-term distributor's online sales of Nike products from next year.

Topsports [HK: 6110] slumped as much as 29.9 percent intraday and closed 24.1 percent lower at HKD1.45 (18 US cents), extending its decline this year to 50 percent.

Nike's decision marks a major shift in its China strategy after revenue in the market declined for eight consecutive quarters. As Nike's largest distributor in mainland China, Topsports said the move will have a significant short-term impact on its business because online sales of Nike products accounted for 22 percent of its total revenue in the fiscal year ended Feb. 28.

Beginning in January 2027, Nike will consolidate its digital presence in China under official flagship stores on Tmall, JD.Com and Douyin, alongside Nike.Com.Cn and the Nike App, Cathy Sparks, vice president and general manager of Nike China, said in a press release today. “These new flagships will serve as the single, elevated destination for Nike within these ecosystems, with clearer product presentation, stronger storytelling and more connected consumer journeys.”

Consumer behavior changed rapidly during and after Covid, and some of Nike's previous moves resulted in a less consistent and trusted shopping experience that failed to deliver the expected growth, Sparks said, adding that the company is revamping its marketplace strategy, starting with digital.

Impact on Topsports

Hong Kong-based Topsports, which has distributed Nike products in China's mainland for 27 years, said it will completely cease online sales of the brand's products beginning Jan. 1, 2027.

Topsports said to Yicai today that it understands and respects Nike's decision, which is based on the brand's long-term strategy, and believes the move will enhance consumer experience and strengthen the brand's appeal over the medium to long term.

The company, which also distributes brands including Adidas, Puma and Converse, intends to continue working with Nike in offline retail, focusing on developing new-concept sports stores and high-quality retail experiences.

Nike's latest financial report showed that revenue in China fell 11 percent to USD5.8 billion in the fiscal year ended May 31, while fourth-quarter revenue declined 12 percent to USD1.3 billion.

The sportswear giant has also reshuffled its China management team in an effort to revive growth. In March, former Nike China Chairman and Chief Executive Officer Angela Wei Dong left the company and was succeeded by Sparks, who previously served as vice president and general manager of Asia Pacific and Latin America.

Topsports has also struggled with slowing growth amid changes in China's consumer market. In fiscal year 2025/26, its net profit fell 2 percent from a year earlier to CNY1.3 billion (USD191.9 million), while revenue declined 5 percent to CNY25.7 billion (USD3.8 billion). Key brands including Nike and Adidas contributed 87 percent of the company's revenue.

Editors: Dou Shicong, Emmi Laine