TopStep plunges 23% as Nike ends China online partnership

TopStep (06110.HK) plunged 23% after Nike said it will terminate its online sales partnership in mainland China, effective Jan. 1, 2027, wiping out billions in market value for one of the sportswear giant's largest distributors.

"TopStep's online sales of Nike products in China will fully cease from Jan. 1, 2027," the company said in a Hong Kong exchange filing, confirming the termination that triggered its worst single-day decline on record. The stock fell as much as 23.04% before paring losses slightly, with trading volume surging to multiple times the 20-day average.

The move is part of Nike's broader overhaul of its China digital strategy. Cathy Sparks, Nike's vice president and general manager for Greater China, said the company will direct shoppers to official Nike-branded storefronts on Tmall, JD.com and Douyin, as well as its own website and mobile app, rather than allowing wholesale partners to sell through their own online channels. The shift affects most of Nike's 16 retail partners in China, with Topsports — another major distributor — estimating that online sales account for roughly 22% of its Nike-related revenue.

For TopStep, the partnership termination represents a catastrophic revenue loss. The company, which relies heavily on distributing Nike products across China, now faces an existential challenge to its business model. BNP Paribas analyst Laurent Vasilescu argued that Nike's biggest problem is product appeal rather than distribution, suggesting that even as Nike tightens its online channel, the brand must win back Chinese consumers who have shifted to local rivals such as Anta and Li Ning. Nike's Greater China sales declined 17% on a constant-currency basis in its latest quarter, worsening from a 10% drop in the prior period, as CEO Elliott Hill's turnaround plan takes shape.

This article is for informational purposes only and does not constitute investment advice.