Dive Brief:
- In the midst of correcting a DTC strategy that went too far, Nike CEO John Donahoe is leaving the business, the company said in a Thursday press release. He will retire from the company on Oct. 13.
- Elliott Hill, a longtime Nike executive who retired in 2020, will take on the position come Oct. 14. Before leaving the sportswear giant four years ago, Hill was Nike’s president of consumer and marketplace, overseeing all commercial and marketing operations for Nike and the Jordan brand.
- Upon taking on the new role, Hill will also become a member of the board of directors and of the executive committee. Donahoe will stay on as an adviser for Nike through Jan. 31.
Dive Insight:
Nike is switching chief executives amid a series of stumbles that have caused disappointing performance at the sportswear giant, which saw revenue fall 2% in its most recent quarter.
In a statement, former chief executive and current Executive Chairman Mark Parker thanked Donahoe for his contributions, particularly in leading the company through the pandemic, and said he was “excited” to welcome Hill back to the brand.
“Given our needs for the future, the past performance of the business, and after conducting a thoughtful succession process, the Board concluded it was clear Elliott’s global expertise, leadership style, and deep understanding of our industry and partners, paired with his passion for sport, our brands, products, consumers, athletes, and employees, make him the right person to lead Nike’s next stage of growth,” Parker said in a statement. “Personally, I have worked with Elliott for more than 30 years and I look forward to supporting him and his senior management team as they seize the opportunities ahead.”
Hill started at Nike in 1988 as an intern, according to his LinkedIn, and later served in a variety of roles, including as director of the team sports division, vice president of U.S. commerce and president of geographies and sales.
“Nike has always been a core part of who I am, and I’m ready to help lead it to an even brighter future,” Hill said in a statement. “I’m eager to reconnect with the many employees and trusted partners I’ve worked with over the years, and just as excited to build new, impactful relationships that will move us ahead. Together with our talented teams, I look forward to delivering bold, innovative products, that set us apart in the marketplace and captivate consumers for years to come.”
It’s been a tough year for Nike, which in December announced a cost-savings plan that included layoffs of about 2% of its total workforce. At the same time, the retailer has been pivoting to correct a direct-to-consumer strategy that went too far.
Donahoe in March acknowledged the company needed to “make some important adjustments” to its consumer direct acceleration strategy, which prioritized DTC over its wholesale partners. The retailer has since leaned back into some of its key partners and in its most recent quarter said it was “embracing a more balanced approach” to growing the business. A class action lawsuit earlier this summer took aim at the strategy as well, saying Donahoe and Chief Financial Officer Matt Friend misled investors about the success of the strategy; Nike did not respond to a request for comment on the lawsuit at the time.
Nike this year also has vowed to return to a better flow of product innovation and deliver “bolder” brand marketing, which has so far played out in a handful of ads under a “Winning isn’t for Everyone” campaign. The retailer has seen some of its hold on consumers slip as rival brands gain steam in the space.
BMO Capital Markets analyst Simeon Siegel said in a Thursday note that Hill’s arrival “breathes new life” into the brand.
“First and foremost, Hill is known-and-liked internally and with retail partners, potentially driving an immediate morale boost,” Siegel wrote. “Clearly success requires exciting product and time, but we expect Hill will drive a return to [Nike’s] competitive advantages (focusing on product/marketing) versus recent years’ change.”
