Nike is planning a major overhaul of its retail offering in Dubai by opening a Niketown in Dubai Mall sometime next year expected to be located in the space that Kinokuniya Bookstore left. Image Credit: Atiq-ur-Rahman/Gulf News

Dubai: Nike is planning a major overhaul of its retail offering in Dubai, according to four people familiar with the matter, with a huge new store slated for 2018.

The world’s biggest sportswear maker will open a Niketown in Dubai Mall sometime next year, said the individuals, who asked not to be identified because the information is not public yet.

In a significant shake-up of its retail offering, the new store will set in motion a reshuffle of its two existing spaces at the mall.

Kinokuniya makes way for Nike

The opening of Nike’s new flagship shop, expected to be located in the space that Kinokuniya Bookstore left in February 2017, will pave the way for the existing Jordan Brand store to move in to the space Nike is vacating on the ground floor.

A Nike Lab store, the company’s high-end retail concept created in 2014, will then open in the old Jordan store, one source said.

The Nike Lab stores feature limited edition collaborations and other rare footwear and clothing.

Dubai would become the ninth city in the world to acquire a Nike Lab, joining Milan, London, Tokyo, Chicago, Paris, New York, Shanghai and Beijing.

The new flagship Niketown store is expected to be one of the brand’s biggest globally, according to three people associated with the situation.

“It will most likely be Nike’s largest store in the world,” said one footwear industry individual familiar with the negotiations.

The largest in the world

The biggest Nike store in the world is currently in the UK: Niketown London, pictured right, covers approximately 42,000 square feet over four floors.

The space that Kinokuniya Bookstore vacated in February is 68,000 square feet, according to the company’s website, meaning that the Nike store would be significantly larger if it took the whole space.

$12 million in annual rent

According to a quarterly report released in June 2017 from Dubai Mall owner Emaar, the company currently charges Dh680 per square foot, with an occupancy rate of 99 per cent across its flagship regional malls.

At this average rate, not factoring in any discounts or special rental agreements, Nike would be expecting to pay over $12 million (Dh44 million) every year to lease the entire space.

In an emailed statement to Gulf News, Sun & Sand Sports said that they were unable to “confirm or provide any information at this stage.”

Reviving the Niketown name

According to one individual familiar with internal discussions at Sun & Sand Sports, the sportswear retailer came to an agreement with Nike to revive the Niketown brand for its new Dubai Mall flagship store.

Since 2013, the US company has been moving away from the Niketown label, renaming its Niketown in San Francisco to simply Nike San Francisco, and doing the same in Chicago, where it did away with name in favour of Nike Chicago.

It is not known why Sun and Sand Sports, the exclusive retailer and distributor of the Nike brand across the Middle East, asked to use the Niketown name.

Over the last two years, the UAE-based Sun & Sand Sports has been aggressively expanding its business, with plans to open 500 Sun & Sand Sports-branded stores between 2015 and 2022.

Nike did not immediately respond to a request for comment.

US retail sales slowing

With retail sales faltering in the US, the Oregon-based company has turned its attention to international markets, especially China, in recent years.

According to one individual with knowledge of the footwear market in the UAE, Dubai Mall’s Jordan store, which sells the famous Air Jordan sneaker and other athletic wear in collaboration with basketball player Michael Jordan, is one of the highest grossing in the world.

Retail analyst Matt Green said that a large space at Dubai Mall was a logical step for the athletic giant.

“Dubai Mall offers [Nike] the opportunity to benefit from strong footfall, plus the design of the mall compares well against other malls. It’s frontages are very nice,” said Green, head of Research & Consulting, UAE at CBRE.

“They know the visibility will help them get as many people to the store. There’s lots of positive drivers for why someone would want to be in that mall,” he added.