Nike’s New CEO Admits the Brand Has Been Competing With Its Partners, Pledges to Fix Relationships With Foot Locker, JD Sports and More
In his first earnings call as Nike‘s chief executive officer Elliott Hill pledged his “unwavering commitment” to the company’s retail partners.
Hill, who replaced John Donahoe as CEO in October, said in a call with analysts on Thursday that re-earning the trust of the company’s wholesale partners is a top priority to help realign business as a whole. Nike’s decision to exit several wholesale doors in 2021 has kept the company behind competitors that have achieved controlled distribution in crucial channels like run specialty. Now, Hill must build on recent efforts to bolster wholesale sales and reengage key partners.
Hill acknowledged that this strong focus on Nike’s digital sales over the last few years has led the brand to compete with its own retail partners for consumer demand.
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“Some partners and channels feel we’ve turned our back on them and we’ve stopped engaging consistently,” Hill said, adding that he has met with many of these key retailers directly in recent weeks. He called executives by name from Dick’s Sporting Goods, Foot Locker, JD Sports, Sports Direct and more chains, many of whom have offered positive commentary about Nike’s turnaround in recent weeks.
“They’re all encouraged by our commitment to delivering new, innovative product, telling emotional and inspiring stories and elevating Nike Direct,” Hill said. “We know our sales teams will have to earn every open to buy dollar, but we’re investing to make sure our partners feel supported. We’ll give them access to our best products and the breadth and depth they need, educate their teams on the latest Nike innovation and provide them with the marketing support both in store and out of home.”
“We will win when our partners win,” Hill added.
In line with this goal, Nike recently rehired and elevated Tom Peddie to the role of vice president, general manager of North America to oversee wholesale.
In addition to fixing wholesale, Hill’s turnaround strategy hinges on a renewed “obsession with sport,” which includes a focus on product innovation, demand creation and less centralization of teams. While he noted some changes might impact financial results in the short term, Hill said he is “making the decisions that are best for the health of our brand and business.”
In the second quarter, Nike reported top and bottom line results that beat the expectations of analysts. Shares of Nike were up more than 10 percent in the initial moments in after hours trading on Thursday.
