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Nike Chief Executive John Donahoe will retire next month in an abrupt leadership change following a period of financial underperformance at the world’s biggest sportswear maker.
Nike veteran Elliott Hill, who served as president of consumer markets before retiring in 2020, will return to the top job effective Oct. 14, Nike’s board of directors said Thursday.
Nike shares rose nearly 10 percent after the change was announced.
Donahoe, who was at Bain Consulting and eBay, has served in the role since January 2020. He was initially praised for steering the brand through the coronavirus pandemic and accelerating the move towards direct-to-consumer sales.
But in recent months, Nike has ceded market share to rivals including upstarts ON and Hoka, and the company cut its guidance in June, leading to a dramatic stock selloff.
Donahoe, 64, said it was “clear that it was time for a change in leadership, and Elliott was the right person.”
Hill, 60, a native of Austin, Texas, began his 32-year career at Nike as a coach and led all business and marketing activities for Nike and its Jordan Brands before moving into sales.
Bill Knight, co-founder and controlling shareholder of Nike, thanked Donahoe for his service to the company. Hill’s experience at the brand is “exactly needed at this time,” he said. We have a lot of work to do, but I look forward to seeing Nike regain its momentum.
Nike shares fell 20 percent in June after the company warned of declining demand for its core products. It acknowledged that a strategy adopted during the pandemic was more aggressive, emphasizing online sales rather than selling through Nike’s traditional mix of brick-and-mortar retail and wholesale partners.
Wall Street analysts openly questioned whether a former consultant and technology executive like Donahoe was the right leader for Nike’s traditional consumer brand. Under his leadership the company last year reached its target of $50 billion in annual revenue. But Donahoe was less visible Product innovation And creating new, cool shoes.
Donahoe acknowledged in June that it had been a “challenging last year” and talked about “regaining our edge” — unusually understated language for a company that is the largest global sales leader in trainers and activewear.
During Donahoe’s tenure, Nike scaled back its relationships with retail partners that had been the bedrock of its sales force, opening up shelf space to younger, hotter brands and traditional rivals like Adidas.
In March, Regis Schultz, chief executive of retailer JD Sports, said Nike’s traditional trainer franchises, including the Air Force 1 and Dunk, were getting tired and that its top rival Adidas was in demand for its myriad colors and styles of the Samba shoe.
“It’s fashion,” he said. “It’s not about inventing a new technology that’s going to change the world. It’s about new silhouettes . . . I think Nike was there, and they’re slowly recognizing that.
Donahoe is the fourth individual and second foreigner chosen to lead Nike in its more than half-century history. By choosing Hill to succeed him, the board has chosen an experienced hand who knows the company’s culture in an effort to return the brand to a place of strength.
Tim Cook, chief executive of Apple and lead independent director of the Nike group, said: “Elliott embodies the spirit of Nike and will bring his deep connection to the sport, passion for their products and competitive instincts to bring the company back to the top. Its game.”
