Nike has revealed that former senior executive Elliott Hill will return to the company, succeeding John Donahoe as president and CEO. This leadership change comes as the sportswear giant seeks to revitalize sales and address increasing competition.
In after-hours trading on Thursday, the company’s shares surged by 8 percent. Hill spent 32 years at Nike, holding senior roles across Europe and North America, where he played a key role in growing the business to over $39 billion. Prior to his retirement in 2020, he served as president of the consumer marketplace, overseeing all commercial and market operations for the Nike and Jordan brands.
Following the CEO announcement, Nike’s market value increased by $11 billion in after-hours trading on Thursday.
Hill’s official start date set for October 14.
Challenges faced by Donahoe
Donahoe had focused on enhancing Nike’s online presence and boosting sales through direct-to-consumer channels. This strategy initially capitalized on the increased demand for athletic and leisurewear following the pandemic, allowing Nike to surpass $50 billion in annual sales for the first time in fiscal 2023. However, sales have recently faced challenges, with growth slowing.
Elliott Hill’s career journey
Hill’s experience with Nike’s highly profitable Jordan brand may prove beneficial in helping the company regain momentum. The resale value of certain Jordan shoes has declined in 2023, as brands like On Running have seen remarkable growth.
Originally from Austin, Texas, Hill began his journey at Nike as an assistant in the Memphis showroom and quickly advanced to a sales role, working out of the Dallas office and engaging with small sporting goods stores.
Read more: Nike at 50, still expanding its global footprint in sports apparel
Strategic shifts and cost savings
In recent years, Nike has scaled back partnerships with retailers, focusing instead on driving sales through its own stores and e-commerce platforms. This shift has not yielded the expected results, prompting the company to seek $2 billion in cost savings over three years. So far, Nike has cut jobs, limited the supply of classic styles like the Air Force 1, and aimed to enhance its supply chain to improve margins.
Hill will further need to “repair some of Nike’s relationships” with retail partners who purchase Nike products at wholesale, some analysts said to Reuters. Nike’s decision to drop certain customers and restrict product availability has led to some resentment among sneaker and footwear retailers, they added.
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