Channel strategy is one of the most consequential decisions an activewear brand makes. The choice between direct-to-consumer (DTC) and wholesale distribution—or the balance between them—determines margins, brand control, market reach, and customer relationships. Getting this balance wrong can mean lost revenue, diluted brand equity, or missed growth opportunities.
The activewear industry is currently undergoing a significant channel recalibration. After years of aggressive DTC prioritization, major brands are reassessing the role of wholesale partnerships. For emerging brands and OEM or ODM sportswear partnerships, understanding the dynamics between these models is essential for making informed distribution decisions.
Defining the Two Models
Direct-to-Consumer (DTC) means the brand sells directly to the end customer through its own channels, typically e-commerce websites and brand-owned retail stores. The brand owns the entire customer experience, from discovery to purchase to post-sale support.
Wholesale means the brand sells products to retailers (department stores, specialty chains, independent boutiques) who then sell to consumers. The brand receives payment at wholesale prices, and the retailer takes responsibility for merchandising, selling, and customer service.
Many activewear brands use a hybrid model, combining both approaches to capture the benefits of each.
The Strategic Trade-Offs
Control and Brand Experience
DTC provides complete control over brand presentation, pricing, and customer experience. Brands can shape every touchpoint and build direct customer relationships. Wholesale requires ceding some control to retail partners. Merchandising, pricing consistency, and in-store presentation vary by retailer.
Revenue and Profit Margins
DTC offers higher gross margins by eliminating the wholesale markdown. However, DTC involves significant costs including website maintenance, marketing, fulfillment, and physical retail operations. Wholesale provides lower margins per unit but requires less investment in customer acquisition and physical retail.
Scale and Reach
Wholesale enables rapid geographic expansion and access to established customer bases. Retail partners provide shelf space and foot traffic that would take years to build independently. DTC requires more time and investment to build awareness and customer acquisition channels.
Data and Customer Insights
DTC provides rich customer data including purchase history, browsing behavior, and direct feedback. This data informs product development and marketing. Wholesale offers limited customer insights, with transaction data typically belonging to the retailer.
Inventory Management
DTC demands more sophisticated inventory management and fulfillment capabilities. Wholesale shifts inventory risk to retailers but can create channel conflict and discounting pressure.
The Industry Shift: From DTC-First to Omnichannel
The activewear industry has seen a significant channel strategy evolution over the past decade.
The DTC-First Era
Nike was the pioneer of aggressive DTC prioritization. Under former CEO John Donahoe, the company pulled back from wholesale partners to focus on its own channels. The strategy initially appeared to work, with digital sales surging and margins improving. However, as demand softened and inventories rose, the limits of a DTC-heavy model became apparent.
The Recalibration
Nike is now navigating a strategic shift. In Q2 2026, wholesale revenues grew 8% to $7.5 billion, while Nike Direct fell 8% to $4.6 billion. The company is rebuilding relationships with retailers, acknowledging that a DTC-only approach limits scale and reach.
Nike CEO Elliott Hill acknowledged the competitive consequences: “We opened shelf space, and now we’re having to earn it back.” By retreating from wholesale, Nike allowed upstart competitors like On Running and Hoka to gain market share.
The Current Landscape
Adidas is pursuing a more pragmatic approach. CEO Bjørn Gulden noted that in a discount-heavy wholesale environment, the brand is using DTC channels for new product launches to defend full-price positioning. DTC grew 15% in Q1 2026 while wholesale grew just 2%.
On Holding (ONON) reported DTC revenue growth of 27.6% in Q3 2025, with DTC now accounting for 39.6% of total sales. However, wholesale remains 60.4% of the business, and the brand emphasizes integrated omnichannel experiences rather than channel substitution.
How Major Brands Approach Channel Balance
Nike: Rebuilding Wholesale Relationships
Nike’s current strategy involves repositioning its digital channel as more premium and reinvesting in wholesale to rebalance the ecosystem. Management describes this as an integrated omnichannel model rather than prioritizing one channel at the expense of another. Early signs in North America suggest this recalibration is improving marketplace health, though the transition brings short-term revenue volatility.
Adidas: Defending Newness Through DTC
Adidas is using DTC channels to protect new product launches from discounting. The brand is selectively launching new products through its own channels before making them available to wholesale partners. This protects margins and brand perception in a promotional environment.
Lululemon: DTC-First with Selective Wholesale
Lululemon’s business model is naturally aligned with a DTC-first strategy, providing greater control over brand experience. As the company scales globally, it uses selective wholesale and partnerships to complement its DTC engine. The key challenge is maintaining pricing discipline and inventory control while scaling.
Vuori: Profitable Multi-Channel Growth
Vuori has embraced a multi-channel strategy with positive cash flow. The brand opened its 100th physical store in August 2025 and grew to a $5.5 billion valuation while remaining consistently profitable. Founder Joe Kudla emphasizes steady growth rather than aggressive expansion.
Fabletics: Entering Wholesale
Fabletics, built on a DTC membership model, is entering wholesale for the first time in 2025 through partners including Nordstrom. The brand sees wholesale as a way to reach new customers who will then become members. Fabletics is targeting $1 billion in annual revenue within two years.
Gymshark: From Digital-Only to Stores
Gymshark, a digitally native brand that accounts for about 50% of its sales in the US, is opening its first permanent US stores. The brand sees stores as drivers of e-commerce sales. Data shows opening a new store leads to a 6.9% increase in online sales in that trade area—and for DTC brands, that figure doubles to 13.9%.
The Consumer Perspective
The Omnichannel Consumer
Modern activewear consumers interact with brands across multiple channels. They research online, try products in stores, and purchase through the channel most convenient at that moment. Consumers who shop both online and in-store demonstrate higher loyalty and spending than single-channel shoppers.
Why Consumers Choose DTC
- Direct access to new product launches
- Exclusive styles and collaborations
- Consistent pricing across channels
- Direct customer service and returns
Why Consumers Choose Wholesale
- Physical product examination before purchase
- Immediate product availability
- In-person customer service
- Returns convenience through local stores
Implications for Emerging Brands
For new activewear brands and smaller players, the channel decision involves different considerations than for large incumbents.
Starting DTC-First
Most emerging brands begin with a DTC-first approach. This allows testing product-market fit, building brand equity, and collecting customer data with lower capital investment than retail expansion. DTC is how brands like Gymshark built their initial customer base.
Using Wholesale for Scale
Wholesale partnerships can accelerate growth once brand and product are proven. Retailers provide distribution scale and access to new customer segments. Sweaty Betty’s Australian launch plan involves online sales initially, followed by wholesale partnerships and physical stores.
The Importance of Channel Integration
The distinction between DTC and wholesale is blurring. Successful brands treat channels as complementary rather than competing. Online drives store traffic, stores boost e-commerce sales, and both channels generate data that improves the overall customer experience.
Key Considerations for Brands
Stage of Brand Development
Early-stage brands typically benefit from DTC focus to build brand identity and customer relationships. Mature brands can leverage wholesale for scale while maintaining DTC for margins and brand control.
Product Category and Price Point
Premium and technical products often perform better in DTC channels where brands can educate customers and justify higher prices. Basic or commodity categories may be more suited to wholesale distribution.
Geographic Strategy
Entering new markets through wholesale partners provides faster market access and lower capital investment. DTC expansion requires building awareness, logistics, and customer acquisition from scratch.
Competitive Positioning
Brands in crowded categories may need DTC differentiation through unique customer experiences. Brands with strong retailer relationships may use wholesale for rapid shelf space acquisition.
OEM and ODM Partnership Implications
For brands working with OEM sportswear or ODM sportswear partners, channel strategy influences product development and cost structure. DTC-focused brands may prioritize unique designs and premium materials. Wholesale-focused brands may need to accommodate retailer requirements and price points.
Conclusion
Activewear channel strategy is not a binary choice between DTC and wholesale. The most successful brands operate integrated omnichannel models that leverage the strengths of each approach.
DTC provides margins, data, and brand control. Wholesale offers scale, reach, and capital efficiency. The optimal balance depends on brand stage, product category, and growth objectives. As Nike, Adidas, and other major players recalibrate their channel strategies, the lesson is clear: channel prioritization alone is insufficient. Success requires disciplined execution and clear definition of each channel’s role.
Looking to develop an effective channel strategy for your activewear brand? Contact Uga Wear today to discuss how our OEM sportswear and ODM sportswear partnerships can support your distribution goals with product quality and production capabilities.
