Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Business

Nike veteran Hill to replace Donahoe as CEO; shares jump

2024 09 20T140621Z 2 LYNXMPEK8J02D RTROPTP 4 JD SPORTS OUTLOOK

Published : , on

By Juveria Tabassum, Nicholas P. Brown

(Reuters) -Nike said on Thursday that former senior executive Elliott Hill will rejoin the company to succeed John Donahoe as president and CEO, as the sportswear giant shakes up its leadership amid efforts to revive sales and battle rising competition.

The company’s shares rose 8% in after-hours trading.

Hill was at Nike for 32 years and held senior leadership positions across Europe and North America where he helped expand the business to more than $39 billion, the company said.

He was previously Nike’s president, consumer marketplace, leading all commercial and market operations for the Nike and Jordan brands before retiring in 2020.

Nike said in a regulatory filing that Hill’s compensation as president and CEO will include an annual base salary of $1.5 million. He will take over as CEO on Oct. 14.

Analysts cheered the move. The CEO change “gives a positive signal because it is someone that knows the brand and knows the company very well,” said Jessica Ramirez of Jane Hali & Associates.

Donahoe was tasked with bolstering Nike’s online presence and driving sales through direct-to-consumer channels.

The push initially helped the company build on the demand for athletic and leisurewear following the pandemic, resulting in Nike exceeding $50 billion in annual sales in fiscal 2023 for the first time.

However, sales have since come under pressure and growth has slowed, according to estimates compiled by LSEG. Nike’s annual sales are expected to fall to $48.84 billion for fiscal 2025 as inflation-weary customers cut back on discretionary spending and China’s market rebounds more slowly than expected.

A lack of innovative and appealing products has also recently tripped demand for Nike. Rival brands including Roger Federer-backed On and Deckers’ Hoka are attracting shoppers and retail partners with sneakers considered more fashionable and trendy.

Expectations for a change at the top were heightened after billionaire investor William Ackman disclosed a stake in Nike. His Pershing Square Capital Management has continued to buy and now owns 16.3 million shares in Nike, a person familiar with the position said. Ackman was not immediately reachable for comment.

A person familiar with Ackman’s thinking said that Hill would have been his top choice to replace Donahoe. Ackman, who announced his Nike stake via a public filing, had not been in touch with the company.

Recently the corporate boards of at least two other consumer and retail companies have moved to toss top executives before activist investors told them to act.

Hill’s background as a former steward of Nike’s valuable Jordan brand, a major profit-driver for the company, could also help the sportswear giant regain some momentum. The value of some Jordan shoes in 2023 had been slipping on the resale market as other sneaker brands, including On Running, experienced meteoric growth.

In the last couple of years, Nike had curtailed partnerships with retailers and pushed ahead with its plan to drive more sales through its own stores and websites. Those sales did not materialize and put the company on a path to seek $2 billion in cost savings over three years.

As part of the plan, Nike has so far cut jobs, reduced supply of classic shoes such as the Air Force 1 and tried to improve supply chain to boost margins.

“It clearly looks like Nike wanted to bring back somebody with a lot of experience” and “deep knowledge of Nike and its issues – unlike John Donahoe, who came in without any experience in the industry,” said David Swartz, senior analyst at  Morningstar Research.

Hill will have to “work on repairing some of Nike’s relationships” with retail partners who buy Nike shoes at wholesale, Swartz added. “Nike has dropped some customers over the years and pulled back some product and that has created some ill will towards Nike” among sneaker and footwear retailers, he said.

Thomas Hayes, chairman at Great Hill Capital, called Hill a “great pick.” Nike now needs to “innovate and repair relationships with wholesalers,” he added. Great Hill Capital does not hold shares in Nike.

Born in Austin, Texas, Hill started his Nike career as an assistant in the Memphis, Tennessee, showroom and was soon promoted to a sales position, working out of the Dallas office and calling on mom-and-pop sporting goods stores.

“I had samples with me, and I would call, make appointments, show up at the sporting goods store and present the line,” Hill said in a December 2023 podcast interview. “I made unbelievable relationships with some of those people. Even today, I still keep in touch with a few of those retailers.” He eventually moved into helping to launch new Nike products.

Nike’s stock market value increased by $11 billion in extended trade on Thursday following the CEO announcement.

(Reporting by Juveria Tabassum in Bengaluru and Nicholas P. Brown in New York; Additional reporting by Ananya Mariam Rajesh in Bengaluru and Svea Herbst-Bayliss in New York; Editing by Shounak Dasgupta, Peter Henderson, Anna Driver and Matthew Lewis)

Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post