Get your free copy of Editor’s Digest
FT editor Roula Khalaf picks her favourite stories in this weekly newsletter.
John Donahoe, CEO of Nike, the world’s largest sportswear maker, is set to step down next month, in a sudden leadership shakeup that ends a period of poor performance for the company.
Nike’s board of directors announced Thursday that Elliot Hill, a Nike veteran who served as president of consumer marketplace until his retirement in 2020, will return as chief executive, effective Oct. 14.
Nike shares rose nearly 10 percent after the changes were announced.
Donahoe, who previously worked at Bain Consulting and eBay, has been in the role since January 2020. He was initially praised for guiding the brand through the COVID-19 pandemic and accelerating its shift to direct-to-consumer sales.
But in recent months, Nike’s shares have plummeted after the company ceded market share to rivals such as upstarts On and Hoka, and in June it cut its earnings outlook.
“It’s clear that now is the time for a leadership transition and Elliott is the right person for the job,” Donahoe, 64, said.
Hill, 60, a native of Austin, Texas, began his 32-year career at Nike as an intern and then moved into sales, leading all commercial and marketing operations for Nike and Jordan Brand.
Nike co-founder and controlling shareholder Phil Knight thanked Donahoe for his contributions to the company, saying Hill’s experience at Nike was “just what we need right now. There’s a lot of work to do, but I look forward to getting Nike back on track.”
Nike shares fell 20% in June after the company warned of slowing demand for its flagship products and acknowledged that its strategy of emphasizing online sales during the pandemic rather than a traditional mix of brick-and-mortar stores and sales through wholesale partners had been too aggressive.
Wall Street analysts had openly questioned whether Mr. Donahoe, a former consultant and tech executive, was qualified to lead Nike, a traditional consumer brand. Under his stewardship, the company hit its goal of $50 billion in annual sales last year. But Mr. Donahoe was seen as falling short on product innovation and developing newer, cooler shoes.
“Last year was tough,” Donahoe acknowledged in June, but said the company would “gain its lead” — an unusual amount of retrospective commentary from the world’s largest seller of sneakers and sportswear.
During Donahoe’s tenure, Nike scaled back relationships with retail partners that had been key to its sales force, freeing up shelf space for younger, more popular brands and traditional rivals such as Adidas.
In March, Regis Schultz, chief executive of retailer JD Sports, said people were becoming tired of Nike’s traditional trainer range, such as the Air Force 1 and Dunk, and wanted more colours and styles of Nike’s Samba shoes, made by arch rival Adidas.
“This is fashion,” he says, “not about finding new technology that’s going to change the world, but about having new silhouettes. I think Nike has been late to the game, and they know it.”
Donahoe is the fourth person and second outsider chosen to lead Nike in its more than half-century history, and in selecting Hill as his successor, the board is selecting an experienced candidate with cultural expertise to help put Nike back on a strong footing.
“Elliott embodies the spirit of Nike and his deep connection to sports, passion for our products and competitive drive will help put the company back on the cutting edge,” said Tim Cook, Apple CEO and lead independent director on Nike’s board of directors.
