Interface News Reporter | Shi Yiying
On the evening of September 19, 2024, local time in North America, American sportswear group Nike announced that it will replace its CEO. Elliott Hill, a former Nike employee, will succeed John Donahoe as the group's global president and CEO.
At this point, the dust has settled on the position of "head" of the world's largest sportswear group after months of turmoil.
Before joining Nike, Tang Ruoxiu joined eBay in 2005 and had previously worked at consulting firm Bain&Company. In January 2020, Tang Ruoxiu officially took over the position of CEO of Nike Group from Nike veteran Mark Parker. He has always received support from Nike co-founder Phil Knight and the board of directors.
The biggest problem faced by Tang Ruoxiu is still Nike's stagnant performance during his tenure. The company's most recent fiscal year 2024 covers the period from June 1, 2023 to May 31, 2024, with global revenue of $51.386 billion (approximately RMB 373.57 billion), a slight increase of 1% year-on-year on a constant exchange rate basis.
In fact, in terms of global scale, in the most recent fiscal year, Nike's scale was still more than twice that of its old rival Adidas and about six times that of Chinese sportswear giant ANTA. However, Adidas grew by over 10% in the recent second quarter, Anta was able to maintain a 13.8% increase in the first half of the year, while Nike did not rise.
Since the release of its annual report on June 28th, Nike's stock price has been in a downward trend, dropping from around $98 per share to the $80 mark, and its market value evaporated by $30 billion overnight. The unfavorable attitude of institutional capital towards it, as well as the dissatisfaction of some shareholders of Nike, has been quite straightforward.
Interestingly, upon the announcement of the CEO replacement, Nike's stock price surged 7.55% to $87.097 after market hours on September 19th Eastern Time, reaching its highest point in nearly three months since the release of the annual report.
In the nearly three months since the release of the annual report, there have been reports of revenue not rising, stock prices falling, and the possibility of a CEO replacement in late August and early September.
Kevin McCarthy, Senior Research Analyst at Neuberger Berman Fund, believes that Nike's problems stem from its management and speculates that Tang Ruoxiu may end his CEO term prematurely. However, the potential successors he mentioned are all from external companies such as Deckers or Footlocker.
However, this time, Nike seems to have learned the lesson from Tang Ruoxiu and did not choose to bring in external players. In the fiercely competitive market environment, Nike believes more in its own system and the executives it cultivates.
In the end, Nike chose Elliott Hill, a "Nike veteran" like Mark Parker. Before retiring in 2020, he worked at Nike for 32 years and held multiple important management positions, mainly in the areas of market and consumer observation. During his tenure as President of Consumer Markets, he helped drive growth for Nike and North America, with Nike's annual revenue exceeding $39 billion.
It is worth noting that Mark Parker retired after working at Nike for 30 years and became the chairman of Disney in early 2023.
It is not difficult to see from Elliott Hill's LinkedIn page that his resume is very Nike. From 1986 to 1987, he served as a trainer for the NFL Dallas Cowboys, the leader of the four major professional sports leagues in North America. After joining Nike in 1988, Hill mainly worked in the sales department until 2000, when he became the Vice President of Sales and Retail for Nike EMEA (Europe, Middle East, and Africa). In 2003, three years later, he became the Vice President and General Manager of Retail at Nike USA. In 2006, Hill was promoted to Vice President of Global Retail at Nike. Before leaving Nike from 2018 to 2020, his last position was Consumer and Marketing Chairman.
Nike Group Executive Chairman Mark Parker said, "We are pleased to welcome Elliott (Hill) back to Nike. Considering our future needs, past business performance, and after careful discussion, the board has made this decision
In fact, in the field of sports consumption, there was a very obvious "cross-border trend" around 2020- executives from the technology and IT industry, luxury goods, entertainment industry, consumer companies and other industries rushed into sports brands. Domestic sports brand companies such as ANTA and Li Ning also follow this trend.
After the epidemic, various consumer sectors around the world have experienced a decline, while competition in the sports consumption sector, which can maintain growth, has intensified.
As the number one sports goods giant, Nike's decision to return as a veteran seems to recognize the discomfort of "outsiders" in the field of sports consumption. As soon as the CEO was replaced and a new appointment was made, Nike's stock price immediately rose, representing the optimism of Wall Street and institutional capital towards its future.