Nike’s board announced on Thursday the unexpected retirement of CEO John Donahoe amid ongoing sales struggles and a declining stock price.
Elliott Hill, a former executive who left the company in 2020, will return as chief executive next month.
Donahoe, who has led Nike since January 2020, played a significant role in steering the company through the disruptions caused by the COVID-19 pandemic, the rise of e-commerce, and supply chain challenges. However, analysts have noted that he lacked the product innovation and marketing expertise essential for a brand known for its performance and style.
Hill, who spent over 32 years with Nike and held senior positions in North America and Europe, oversaw marketing and commercial operations prior to his retirement. His return is seen as a strategic move to refocus Nike on its core strengths in product innovation and storytelling, which analysts believe have been overshadowed by the company’s shift towards direct sales channels.
Nike’s stock has fallen 24% this year, significantly down from its peak of $177 in November 2021. The company reported a 2% year-over-year sales decline in its most recent quarter, marking the slowest annual growth rate in its history. Increased competition from newer brands such as Hoka and On, alongside challenges in consumer spending, has contributed to these difficulties.
As part of a broader cost-cutting initiative, Nike has also laid off around 700 employees, raising concerns about the impact on its leadership and innovation capacity. Despite these challenges, the announcement of Hill’s return led to a roughly 10% increase in Nike’s stock during after-hours trading.
In his statement, Donahoe acknowledged the need for new leadership at this juncture, expressing confidence in Hill’s ability to lead the company forward. Hill expressed eagerness to reconnect with the team and focus on delivering innovative products that resonate with consumers.
With input from BBC, the New York Times, and the Washington Post.
