By Juveria Tabassum
(Reuters) – Nike said on Thursday that former CEO Elliott Hill will return to the company to succeed John Donahoe as president and CEO, as the sportswear giant shakes up its top brass to revive sales and fend off growing competition.
The company’s shares rose 9% in extended trading.
Hill spent 32 years at Nike, holding senior management positions in Europe and North America, and was responsible for growing the company to more than $39 billion, the company said.
Hill was previously president of consumer markets at Nike, where he led all commercial and marketing activities for the Nike and Jordan brands. He retired 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. Hill will take over as CEO on Oct. 14.
According to Jessica Ramirez, an analyst at Jane Hali & Associates, “the CEO change sends a positive signal because it is someone who knows the brand and the company very well.”
Donahoe was tasked with strengthening Nike’s online presence and driving sales through direct to consumer channels.
That boost initially helped the company capitalize on post-pandemic demand for athleisure, helping Nike top $50 billion in annual revenue for the first time in fiscal 2023.
Since then, however, sales have been under pressure and growth has slowed. LSEG expects Nike’s annual revenue for fiscal 2025 to reach $48.87 billion, as inflation-conscious consumers curb spending and the growth market of China recovers more slowly than expected.
A lack of innovative and attractive products has also reduced demand for Nike, while rival brands including On (sponsored by Roger Federer) and Hoka (owned by Deckers) attract customers with their more fashionable and trendy products.
Expectations for a shakeup at the top grew after billionaire investor William Ackman announced a stake in Nike. Ackman has not commented on his plans for the company.
(Additional reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Sriraj Kalluvila, Krishna Chandra Eluri and Shounak Dasgupta)
