Nike is banking on a fresh start with the appointment of longtime company insider Elliott Hill as its new CEO. The move has already sparked an 8% rise in stock value. Investors are optimistic, hoping Hill can guide the sportswear giant out of its recent struggles. Hill succeeds John Donahoe, who steps down after a mixed performance as CEO.
Donahoe, who joined Nike in 2020, initially impressed by navigating the company through the COVID-19 pandemic and advancing its digital sales strategy. Under his leadership, Nike’s stock surged, more than doubling and reaching a high of $177.51 in November 2021. However, that success has waned, with shares down 24% this year, settling just above $80 before the recent bump to nearly $86 following Hill’s appointment.
One of Donahoe’s most significant moves was an aggressive shift toward direct-to-consumer sales, cutting ties with major retail partners like Amazon and Foot Locker.
While this strategy initially boosted revenues—reaching a record $51 billion last year—it also left space for competitors like Adidas, Puma, and emerging brands such as Brooks and On to gain a foothold in traditional retail.
Despite its early success, Nike has since struggled to meet sales expectations, recently reporting a projected 10% quarterly sales drop—far worse than the 3.2% decline analysts had predicted. Additionally, cost-cutting measures, including layoffs affecting 2% of its workforce, have yet to reverse the decline. There are also growing concerns about the potential loss of key talent within the company.
Hill, who started his Nike career as an intern in the 1980s and rose to lead the company’s consumer and marketplace division, is seen as a stabilizing force with the experience to revitalize the brand. Analysts, including Lorraine Hutchinson of Bank of America, are optimistic about Hill’s deep history with Nike and his understanding of the challenges ahead. Many believe his leadership could reignite product innovation and rebuild critical retail partnerships.
Nike co-founder Phil Knight has also expressed confidence in Hill, emphasizing that his deep knowledge of the company’s culture and history makes him well-suited to lead Nike’s turnaround.
To entice Hill back, Nike has offered him a $27 million compensation package. Investors are betting that he can deliver the results needed to restore Nike to its former position as the leading brand in sportswear.
Nike’s Missed Opportunity in the Running Boom
Since the pandemic, the running world has changed dramatically.
Once the dominant force in running culture, Nike has seen its market share decline while brands like Hoka, On, and Brooks have surged ahead. This has contributed to the company’s weaker sales and cautious outlook for the coming years.
The post-pandemic running community has become more inclusive, attracting a wave of newcomers. Brendan Eng, who leads a Portland-based running group, has seen his membership quadruple since 2021, now boasting nearly 100 participants. At these events, brands like New Balance, Hoka, and Asics are frequently present, offering runners the chance to test their products and enjoy perks like free drinks.
However, one brand is conspicuously absent: Nike.
“In the three years I’ve led this group, there have only been two Nike road demos. I feel like I’ve seen the Hoka rep four times this year,” Eng remarked.
Portland, home to Nike’s headquarters in nearby Beaverton, has experienced a boom in run clubs, with various shoe brands capitalizing on the trend. Yet, many in the local running scene feel Nike’s presence has diminished, a notable shift for a brand that once dominated the running world.
For years, Nike held a near-monopoly over the running market, commanding attention from all types of runners. However, in recent years, the company has shifted focus to other areas, like limited-edition shoes (hello, super shoes), allowing competitors to step in. Brands like Brooks, Hoka, and Asics have eagerly seized the opportunity, eating into Nike’s market share.
Despite its reduced footprint, Nike maintains that it remains deeply connected to Oregon’s running community and is committed to helping runners through innovation. The company is doubling the size of its team, which is dedicated to engaging everyday runners and supporting local running clubs, emphasizing its role in Portland’s running culture.
However, run club organizers like Eng believe brands like Hoka, Brooks, and Asics have adapted better to the needs of today’s runners by focusing on community engagement. These brands have successfully tapped into a growing willingness among runners to explore new gear and switch brands when they find something better.
Running clubs, once exclusive to elite athletes, have become more inclusive, allowing anyone to join.
This shift has opened the door for brands to offer fresh perspectives. Natalia Barwegen, founder of the FoPo Run Club in Portland, now sees about 60 runners regularly participate. Her club hosted its first brand demo two years ago, led by Hoka, and has since welcomed other brands like Mizuno and Brooks.
“Sometimes Nike reps focus on the cool, hip groups downtown and the younger crowd, leaving other clubs out,” Barwegen noted.
Other brands, like New Balance, take a more consistent approach, sending field reps to run club leaders and coaches worldwide. Kevin Fitzpatrick, VP of Running at New Balance, explains their goal is to create lasting relationships with runners, even if the immediate returns aren’t obvious.
Zurich-based On follows a similar strategy, even launching its own running groups. On recently opened a store in Portland and has unofficially claimed Wednesdays for its run clubs, drawing participants from across the city.
It’s clear that Nike’s once firm grip on running culture has loosened, allowing other brands to thrive by consistently engaging and building a grassroots presence. As Eng summed it up, “People are going with the brands that show up more.”
