Nike (NKE) gained Wednesday following reports indicating a potential direct-sale deal with Amazon (AMZN), sending shares of Foot Locker (FL) sharply lower and leading Wall Street to call the event a possible negative for sporting goods retailers and department stores.

WHAT'S NEW: NPD Group's Matt Powell tweeted early Wednesday: "Hear Nike will sell directly on Amazon." Following that statement, Bloomberg quoted a source as saying Amazon will start selling Nike shoes directly via a "brand-registry" program that curates selection to fight counterfeiters. The Wall Street Journal added its sources to the pile of confirmatory reports later in the afternoon, saying Nike has agreed to sell "some" products directly on Amazon in exchange for the company policing counterfeit and third-party sales.

GOLDMAN SACHS CHECKS: Goldman Sachs analyst Lindsay Mann says channel checks "indicate NKE could be close to commencing a direct relationship selling product on Amazon." She notes that Nike products are already "abundantly available" on Amazon through third-party sellers, but argues that this new step would give the company direct economic exposure to a significant distribution channel while improving brand presentation on the platform and expanding its access to millennial consumers. Based on her benchmarking of other wholesale brands on Amazon.com, Mann doesn't expect the move to be immediately needle-moving for Nike, and estimates the company building an incremental 100 basis points of global sales as the partnership ramps. More generally, the analyst says Nike's potential move could "inspire" other holdout wholesale brands to pursue their own direct relationships with Amazon. Turning to Dicks Sporting (DKS) and Hibbett Sports (HIBB), Mann says Nike's move would amount to incremental competition for sporting goods retailers that could offset the market share gains accruing to Dicks in the wake of bankruptcies in the space.

NEGATIVE FOR DEPARTMENT STORES: Gordon Haskett analyst Charles Grom says Nike's potential move would "clearly have a negative impact" on department stores, with particular implications for J.C. Penney (JCP) and Kohl's (KSS) as one of their "big national brand traffic drivers" would be impaired.

PRICE ACTION: Shares of Nike are up 1.8% in afternoon trading while shoe-centric retailers Foot Locker and Finish Line (FINL) are down 6% and 4.3%, respectively. Nike's smaller rival Under Armour (UAA), meanwhile, is lower by about 2%.