On Thursday, Nike made headlines by announcing that John Donahoe, who has served as CEO since January 2020, will step down from his role on October 13. Elliott Hill, a Nike veteran who had previously retired, will return to take over the position the following day. Donahoe will remain as an advisor until the end of January.
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Nike’s shares rose 8% in after-hours trading on Thursday, despite having dropped more than 25% this year. Mark Parker, Nike’s Executive Chairman, shared, “I am excited to welcome Elliott back. With his global experience, leadership style, and deep understanding of our industry, Elliott is the right person to lead Nike into its next phase of growth.”
Nike is currently undergoing a major restructuring after shifting its strategy to sell directly to consumers. Critics argue that in the process of building out sales at its own stores and website, Nike lost its focus on innovation and failed to produce the groundbreaking products that once defined the brand.
In late June, when Nike reported its fiscal fourth-quarter results, it warned that sales could drop 10% during the current quarter due to weak demand in China and uneven consumer trends worldwide. This outlook was far worse than the 3.2% decline analysts had expected. Following the report, Nike experienced its worst trading day in history, leading some analysts to speculate that Donahoe would soon be replaced.
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Although Phil Knight, Nike’s co-founder, had previously expressed unwavering confidence in Donahoe, he now expressed excitement to welcome Hill back. “Leadership changes are never easy, but this transition has been handled thoughtfully and with a strong commitment to Nike. I look forward to seeing Nike back on track,” Knight stated.
Donahoe acknowledged that “now was the time for a leadership change” and agreed that Hill was the right person to continue Nike’s journey. Hill, who has 32 years of experience at Nike, starting as an intern in the 1980s and rising to President of the Consumer and Marketplace division, shared his readiness to lead Nike into a brighter future. Hill was a beloved figure at Nike before his retirement in 2020.
As Nike struggles to return to its core values and regain its market leadership in sneakers and athletic apparel, Hill is expected to bring a fresh perspective. Unlike his predecessors, Donahoe was not from a retail background but had led companies like eBay and Bain & Co. He was chosen to help drive Nike’s digital transformation and direct selling strategy.
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Under Donahoe’s leadership, Nike’s revenue grew from $39.1 billion in fiscal 2019 to $51.4 billion in fiscal 2024. However, as the Covid-19 pandemic ended, the weaknesses in Nike’s strategy began to show. New competitors like On Running and Hoka seized the opportunity left by Nike’s pullback from wholesale partners.
In an effort to correct course, Nike announced a major restructuring plan to cut costs by about $2 billion over the next three years and reduce its workforce by 2%. Hill faces the daunting task of restoring morale and culture at Nike, which experts believe is currently struggling.
Jessica Ramirez, a senior research analyst at Jane Hali & Associates, noted, “Hill has a lot of work ahead of him, but the key will be to rebuild the culture and spirit, which will enable Nike to create more innovative products.”
Hill’s return brings renewed hope for Nike as the iconic brand seeks to reclaim its lost glory.
