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Elliott Hill is a former Nike executive who had retired in 2020 after 32 years at the company. Now, he’s stepping up to lead the brand forward as CEO, after news broke last week that John Donahoe is stepping down as of 13 October. (Donahoe will stay in his board advisory role through January.)
Hill joins at a critical moment for the sportswear giant, which has struggled to keep up with its once-leading performance amid the rise of new, disruptive players like On and Hoka. Revenue-wise, Nike remains the largest sportswear player (the company reported earnings of $51.36 billion for fiscal 2024). But the brand has lost cultural cachet due to a lack of innovation, analysts agree, driving a portion of sales to these younger players. Earlier this year, Nike laid off approximately 1,600 people (about 2 per cent of its workforce). This was after the company missed expectations last September for the first time in two years.
Under Donahoe — and now Hill — the brand is under pressure to course correct.
Investors are happy about the leadership switch-up. Nike shares rose more than 8 per cent in after-hours trading after the Thursday announcement, and the next morning, shares were up over another 7 per cent in pre-market trading. Bernstein analyst Aneesha Sherman called both Hill’s candidacy and the timing “ideal” in a note. Bank of America managing director Lorraine Hutchinson said Nike needs someone with a “fresh perspective” to lead the brand through its new strategy and product focus acceleration.
“Nike is about to embark on a really significant strategic change, so we think now is the right time for a shake-up in management,” Hutchinson tells Vogue Business. “Hill is interesting because he combines somebody who is deeply familiar with Nike and its innovation muscle, but also brings a fresh perspective from spending the last five years outside of Nike. It’s an interesting combination of an internal and external hire.” Nike was unable to comment further as the company is in a quiet period ahead of its 1 October earnings.
What exactly does Hill need to do to get Nike back on track?
Even out the ecosystem
In recent years, Nike has decreased its wholesale presence in favour of high-touch direct channels such as its app and higher-concept stores. This strategy to lean into DTC may have gone too far, analysts say, as it overlooks the necessity of wholesale, speciality retail and outlets for a tiered approach to different consumer groups.
Because of this, Hill’s existing retailer relationships from his long tenure at Nike are a positive, analysts agree. In a note, Deutsche Bank analysts said that Hill’s internal and retail partner relationships “should provide an immediate morale boost”.
Nike has already acknowledged the impact of its wholesale pullback, and has begun to shift back. After reducing its presence in Foot Locker in 2022, the brand plans to invest more in the retailer this year. In Nike’s fourth-quarter and full-year earnings call in July, CFO Matthew Friend flagged that the brand has been increasing the supply of its franchises in the wholesale marketplace. Donahoe echoed this sentiment on the call. “We said we want to be where the consumer is, whether that’s digital or our own door or wholesale,” he said. “We’re embracing a more balanced approach to growing the whole marketplace.”
This is key, Hutchinson says: Nike needs to let the consumer decide where they want to shop. “One of the mistakes Nike has made over the past few years is trying to dictate the business mix to the customer,” she says. “Instead, the customer will zig and zag and change preferences all the time. If you try to push them into one channel, they’ll just go somewhere else.”
Analysts agree that a big misstep was thinking Covid trends would linger. “In 2021 they took too aggressive of an approach, expecting e-commerce penetration to stay at Covid levels — which it didn’t, obviously,” Sherman says. Now, she says, Nike is having to partially walk back this double-down — especially the decision to cut its Running speciality retail (stores that exclusively carry running gear), which was a “key consumer touchpoint that drove brand heat”, per Bernstein. These running-specific stores are where many road runners go for discovery, Hutchinson says, meaning Nike has “donated” some share to emerging rivals. The stores also offer category-specific insights that DTC can’t, such as how shoes measure up against competitors — and why — Sherman flags.
But, Sherman says, DTC remains an important channel — perhaps even more so than wholesale — in the context of a more balanced ecosystem. “This is not a walk-back of the entire DTC strategy,” she says. “I expect the channels to grow in a more balanced way over the next year or two, and for DTC to grow slightly faster than wholesale over the longer-term.”
Innovate
Product innovation has been a pain point for Nike in recent years.
Bernstein analysts broke down this critique, based on conversations with former Nike execs: the design process became over-complex; reduced consumer insight work and trend monitoring meant designers couldn’t best gauge consumer preference; and Nike leadership prioritised tech and channel at the expense of product.
The brand attempted to remedy this public perception of a lack of innovation at a large-scale Paris event in March, aptly called “Reinventing Air”, which doubled as an Olympics push. The three-day event — on which the company spent millions and flew in over 400 editors, creators, marketplace partners and investors — zeroed in on Nike’s past, present and future footwear innovation, including a new Pegasus Premium model set to launch in 2025.
The promise to up innovation left analysts optimistic; that month, Bank of America upgraded Nike shares from “neutral” to “buy” for the first time in over two years. “Nike’s history would say that they’ve always come out swinging after a time of lower levels of innovation,” managing director Hutchinson told Vogue Business at the time.
At the event, which focused on Nike’s Air franchise, Nike made clear its commitment to what it calls its “multi-year innovation cycle”. Donahoe doubled down on this in Nike’s latest earnings call: “We’re moving aggressively to reestablish our innovation edge.” The early results are encouraging, with performance up double-digits in the fourth quarter. This is a good indicator of brand health, Hutchinson says, noting that Nike now needs to match this for its lifestyle offering.
Where Nike has faltered on product innovation, it’s made headway in its cross-cultural engagements — including finessing its fashion niche. The brand has always partnered with fashion and music, but in recent years, it’s found its fashion groove via a number of high-fashion plays, including a 2023 Paris Couture Week dance performance. More recently, the brand debuted a sell-out Bode collab, and its Cortez sneakers featured on New York it-brand Kallmeyer’s Spring/Summer 2025 runway earlier this month.
But focus needs to return to product across the board, experts agree. Not just via smaller-scale fashion collabs or ultra-serious athlete gear levels, but on Nike’s mass sneaker offerings.
Just do it
The turnaround will take time, but the market will be more forgiving under a new CEO, Sherman says. She estimates a resolution around the first half of fiscal 2026. Under Hill, Sherman wants to see updates to the design process to enable more speed; improved feedback loops to understand changing consumer preferences; and the replacement of old product with innovation.
Hutchinson expects next week’s earnings (1 October) to be status quo, and that Nike will reiterate its fourth-quarter guidance. But she agrees that product innovation will be a key early indicator of success under Hill — of whom she says “a lot will be expected very quickly”.
“It will have a lot to do with new product launches and innovations,” Hutchinson says. “Those are things that he can’t engineer immediately, but have been underway for some time, so he can look at the pipeline and tweak it in certain ways.” Given Nike’s product development pipeline has been accelerated in the past few months, the go-to-market strategy for these products will be where Hill can have an immediate impact, she says.
Marketing will be key, too, Hutchinson adds. “[Nike has] drawn a line in the sand in terms of making sure that they’ve cut a lot of costs, and they’re reinvesting a significant amount of that back into customer-facing activities,” she says. “That’s going to be very important, especially as there’s more newness to launch, to make sure that the customer knows about it.”
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