Losing momentum, the major American sportswear and equipment group Nike announced on Thursday 19 September the imminent departure of its CEO, John Donahoe, at the age of 64. The latter will be replaced from mid-October by a former executive of the group, Elliott Hill.
“The Council [d’administration] and John Donahoe decided he was going to retire (…) effective October 13. He will remain an advisor to the group to ensure a smooth transition until January 31, 2025.”is specified in a press release.
Elliott Hill, 60, who will take over as CEO on October 14, held a number of senior roles in Europe and North America within Nike before retiring in 2020 after a 32-year career.
Sales in decline
According to the press release, he was involved in transforming the group into a company with a turnover of more than 39 billion dollars (35 billion euros). In e-commerce after the close of trading on the New York Stock Exchange, Nike shares rose by 7.58%. They had fallen by around 24% since the beginning of the year.
“It is clear that it is time for management changes and Elliott is the right person”Donahoe was quoted as saying in the press release. The former eBay boss took up his position at Nike in January 2020 after serving on the company’s board of directors since 2014.
For his part, the future boss, Elliott Hill, said “be willing to help lead [Nike] Towards an even better future » proposing “Bold and innovative products.”
This announcement comes at a time when the group, which will be released on 1Ahem October, with its first quarter results delayed, is going through a difficult period with its sales falling for several quarters – below market expectations – and disappointing prospects. In June, it lowered its objectives for the current financial year due to“Growing uncertainty about the economic environment” and unfavorable exchange rate effects, linked to the strength of the dollar.
A “transition” year 2025
In February, the Beaverton, Oregon-based company announced it would cut 2% of its global workforce, or just over 1,600 jobs, in an effort to cut costs and reinvest savings into what it sees as high-growth sectors such as sports, health and wellness.
Fiscal year 2025 “It will be a year of transition” For Nike, Donahoe warned, he had forecast a drop in sales of around 5%, with a sharper decline in the first half than in the second. On the other hand, he expected an improvement in margins, thanks in particular to a more limited use of promotions and lower production costs.
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In a recent note, TD Cowen analysts highlighted that “Innovation had not yet led to an improvement in demand” and that Nike’s reduction in its three largest footwear franchises would affect sales in the current financial year.
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