Nike CEO John Donahoe attends the annual Allen & Company Sun Valley Media and Technology Conference at Sun Valley Resort in Sun Valley, Idaho, the United States on July 10, 2024.
Brendan McDermid | Reuters
Nike Chief executive John Donahoe has resigned, the company announced Thursday, with company veteran Elliott Hill set to return to take the reins at the sneaker giant.
Donahoe, who has served as Nike’s chief executive since January 2020, will retire on October 13. Donahoe will remain as consultant until the end of January.
The stock rose 8% in after-hours trading Thursday. As of closing, the stock price has fallen more than 25% this year.
“I am pleased to welcome Elliott back to Nike. After considering our future needs, past business performance, and a thoughtful succession process, the Board concluded that Elliott’s global expertise, leadership The style and deep understanding of the company are obvious.
Nike is undergoing a broader restructuring after shifting its strategy to selling directly to consumers. Critics say that in Nike’s push to expand sales in its own stores and on its website, it has neglected innovation and failed to produce the types of groundbreaking sneakers the company is known for.
At the end of June, when Nike announced its fourth-quarter results, it warned that it expected sales to fall 10% this quarter, citing weak demand in China and “unbalanced” global consumption trends.
The outlook was well below analysts’ expectations for a 3.2% decline.
The sketchy report follows Nike’s worst trading day ever, with some analysts speculating that Donahoe will soon be ousted and replaced by a new chief executive. At the time, Nike co-founder Phil Knight said the company stood by Donahoe and that the executive had his “unwavering confidence and full support.”
But on Thursday, Knight said in a statement that he was excited to welcome Hill back to the team.
“Leadership changes are never easy, they test you and they present challenges, but this transition was made with careful consideration and an unwavering commitment to Nike,” Knight said. “Looking ahead, I’m very excited to welcome Elliott back to the team. His experience, understanding of Nike and leadership are exactly what is needed right now. We still have a lot of work to do, but I’m looking for Looking forward to seeing Nike get back to its old pace.
“It is clear that it is time for a change in leadership,” Donahoe said in a statement.
“Elliott is the right fit. I look forward to seeing Nike and Elliott’s future success,” he said.
Elliott Hill to be President and CEO of Nike
Courtesy: Nike
Hill, who now lives in Austin, started interning at Nike in the 1980s and first became interested in the company after writing a paper about the company for his graduate school marketing class, according to a person familiar with the matter. The company became interested. interview He donated in 2020.
Over 32 years, Hill rose through the ranks, eventually becoming president of the company’s consumer and marketing division, responsible for leading all commercial and marketing operations for Nike and Jordan Brand. People close to him told CNBC that he was well-liked by employees before his retirement in 2020.
“Nike has been a core part of who I am, and I’m ready to help move it into a brighter future,” Hill said in a statement. “I’m eager to join the many employees and trusted partners I’ve worked with over the years. Reconnecting and excited to build new, impactful relationships that will drive us forward, I look forward to delivering bold, innovative products that will differentiate us in the market and into the future. years to attract consumers.
As it navigates its current tough times, Nike is trying to return to the fundamentals that have long defined its business and made it the market leader in athletic footwear and athletic apparel. Donahoe is not a retailer compared to previous leaders of Nike, who previously helmed companies like Nike eBay and consulting firm Bain & Company. He was appointed in part for his digital capabilities so he can help lead Nike’s direct sales strategy, which includes building a strong e-commerce presence and data collection efforts.
During Donahoe’s tenure, Nike’s annual sales grew from $39.1 billion in fiscal 2019 to $51.4 billion in fiscal 2024. The strategy seemed to be working — until the pandemic began to wind down. As Nike works to cut off its wholesale partners, it paves the way for a host of upstart competitors like On Running and Hoka to capture this critical shelf space and capture market share.
Earlier this year, Donahoe acknowledged that Nike went too far in getting rid of wholesale partners and said the company was addressing the issue. In December, the company also announced a broad restructuring plan to cut costs by about $2 billion over the next three years. The company later said it would cut 2% of its workforce, or more than 1,500 jobs, so it could invest in growth areas such as running, the women’s category and Jordan Brand.
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