Nike appoints new CEO as sportswear big’s gross sales come below stress

Nike mentioned on Thursday that former senior govt Elliott Hill would rejoin the corporate to succeed John Donahoe as president and CEO because the sportswear big shakes up its prime rank amid efforts to revive gross sales and battle rising competitors.

The corporate’s shares had been up 9% in prolonged buying and selling.

Hill was at Nike for 32 years and held senior management positions throughout Europe and North America and was answerable for serving to develop the enterprise to greater than $39bn, the corporate mentioned.

Hill beforehand was president, client market at Nike, main all business and market operations for Nike and its Jordan model, earlier than retiring in 2020.

Nike mentioned in a regulatory submitting that Hill’s compensation as president and CEO would come with an annual base wage of $1.5m. Hill will take over as CEO on 14 October.

The CEO change “provides a optimistic sign as a result of it’s somebody that is aware of the model and is aware of the corporate very nicely”, mentioned Jessica Ramírez, an analyst at Jane Hali & Associates.

Donahoe was tasked with bolstering Nike’s on-line presence and drove gross sales via direct-to-consumer channels.

The push initially helped the corporate construct on the demand for athleisure following the pandemic, leading to Nike touching greater than $50bn in annual gross sales in fiscal 2023 for the primary time.

Nevertheless, gross sales have since come below stress and development has slowed with LSEG expectations of Nike’s annual gross sales at $48.87bn for fiscal 2025 as inflation-weary clients reduce on discretionary spending and a slower-than-expected rebound in development market China.

An absence of modern and interesting merchandise has additionally tripped demand for Nike as rival manufacturers, together with Roger Federer-backed On and Deckers’ Hoka, entice clients with their extra modern and stylish merchandise.

Expectations for a change on the prime had been heightened after the billionaire investor Invoice Ackman disclosed a stake in Nike. Ackman has not commented on his plans for the corporate.