Nike’s CEO, John Donahoe, has stepped down from his position, effective immediately, amidst declining sales. The company has appointed Elliott Hill, who previously served as an executive before Donahoe’s appointment in 2020, as the new CEO. Hill is slated to assume his role next month.
Beaverton, Oregon, September 20, 2024 – Nike’s board of directors announced on Thursday that John Donahoe, the company’s CEO, will be retiring. This decision comes amid the company’s struggles with merchandising and a declining stock price. Elliott Hill, who retired from Nike in 2020 after Donahoe took over, will be returning to the company as the new CEO next month. Analysts believe this leadership change could help Nike regain its focus on its core strengths: powerful marketing and innovative product development.
Donahoe has been at the helm of Nike since 2020, navigating the company through challenges posed by the COVID-19 pandemic, supply chain disruptions, and the growth of e-commerce. However, he was not perceived as an innovator or a marketer, qualities considered crucial for a company like Nike, known for its blend of performance and style. On the other hand, Hill brings over 32 years of experience with Nike, one of the most recognized athletic apparel brands globally. He joined the company as an intern in 1988 and worked across various departments, both in Europe and North America. Prior to his retirement in 2020, Hill oversaw marketing and commercial operations for both the Nike and Jordan brands.
Analysts suggest that Nike has been more focused on building direct selling channels rather than developing new products in recent years. Simeon Siegel, a retail analyst at BMO Capital Markets, pointed out that Nike’s “magic” stemmed from its position as the leading player in the sneaker market, backed by a substantial marketing budget. “Nike is known for its storytelling. When the primary focus becomes ongoing direct as opposed to telling these stories, some of that magic falls behind,” Siegel explained.
Mark Parker, Nike’s executive chairman and former CEO, stated that the board conducted a “thoughtful succession process.” In a statement, he called Hill the “right person to lead Nike’s next stage of growth.” Following the announcement of Donahoe’s retirement and Hill’s return as CEO, Nike’s shares surged by approximately 10% in aftermarket trading. The company’s stock has experienced a 24% decline this year, closing at $81 per share on Thursday, significantly lower than its peak of $177 reached in November 2021. A substantial portion of these recent losses occurred in late June when the stock dropped 20% after the company’s financial results surprised analysts and investors.
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