Nike Inc. announced recently that it is pulling Nike-brand shoes and apparel from Sears department stores. The decision is a setback for the broadline retailer that carries a wide array of both national and exclusive footwear brands.

Some retail observers have questioned why Nike would opt out of selling to the nation's third-largest retailer, with $55 billion in annual sales. News reports noted that Nike's announcement came just weeks after Kmart Holdings acquired Sears for $12.3 billion, and some analysts believe that the world's leading athletic-footwear manufacturer wants to prevent Sears from distributing its apparel through Kmart--a retailer whose discount reputation is inconsistent with Nike's prestigious brand image.

Nike has been known to steer away from discount chains for fear of compromising the premium image of its product; but the company is not always consistent. The Beaverton, Oregon-based shoemaker sells cheaper products in Wal-Mart under the Starter brand, and it continues to deal with other mid-priced chains such as Kohl's. It appears that Sears alone has been barred from associating with the famous Swoosh, and the one-time catalog retailer must now look to other national brands to fill Nike's rather large shoes.