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Nike Veteran Hill to Replace Donahoe as CEO; Shares Jump 

The Nike logo is shown on a store in Miami Beach, Fla. on Aug. 8, 2017. (AP)
The Nike logo is shown on a store in Miami Beach, Fla. on Aug. 8, 2017. (AP)
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Nike Veteran Hill to Replace Donahoe as CEO; Shares Jump 

The Nike logo is shown on a store in Miami Beach, Fla. on Aug. 8, 2017. (AP)
The Nike logo is shown on a store in Miami Beach, Fla. on Aug. 8, 2017. (AP)

Nike said on Thursday that former senior executive Elliott Hill will rejoin the company to succeed John Donahoe as president and CEO, as the sportswear giant shakes up its leadership amid efforts to revive sales and battle rising competition.

The company's shares rose 8% in after-hours trading.

Hill was at Nike for 32 years and held senior leadership positions across Europe and North America where he helped expand the business to more than $39 billion, the company said.

He was previously Nike's president, consumer marketplace, leading all commercial and market operations for the Nike and Jordan brands before retiring 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. He will take over as CEO on Oct. 14.

Analysts cheered the move. The CEO change "gives a positive signal because it is someone that knows the brand and knows the company very well," said Jessica Ramirez of Jane Hali & Associates.

Donahoe was tasked with bolstering Nike's online presence and driving sales through direct-to-consumer channels.

The push initially helped the company build on the demand for athletic and leisurewear following the pandemic, resulting in Nike exceeding $50 billion in annual sales in fiscal 2023 for the first time.

However, sales have since come under pressure and growth has slowed, according to estimates compiled by LSEG. Nike's annual sales are expected to fall to $48.84 billion for fiscal 2025 as inflation-weary customers cut back on discretionary spending and China's market rebounds more slowly than expected.

A lack of innovative and appealing products has also recently tripped demand for Nike. Rival brands including Roger Federer-backed On and Deckers' Hoka are attracting shoppers and retail partners with sneakers considered more fashionable and trendy.

Expectations for a change at the top were heightened after billionaire investor William Ackman disclosed a stake in Nike. His Pershing Square Capital Management has continued to buy and now owns 16.3 million shares in Nike, a person familiar with the position said. Ackman was not immediately reachable for comment.

A person familiar with Ackman's thinking said that Hill would have been his top choice to replace Donahoe. Ackman, who announced his Nike stake via a public filing, had not been in touch with the company.

Recently the corporate boards of at least two other consumer and retail companies have moved to toss top executives before activist investors told them to act.

Hill's background as a former steward of Nike's valuable Jordan brand, a major profit-driver for the company, could also help the sportswear giant regain some momentum.

The value of some Jordan shoes in 2023 had been slipping on the resale market as other sneaker brands, including On Running, experienced meteoric growth.

In the last couple of years, Nike had curtailed partnerships with retailers and pushed ahead with its plan to drive more sales through its own stores and websites. Those sales did not materialize and put the company on a path to seek $2 billion in cost savings over three years.

As part of the plan, Nike has so far cut jobs, reduced supply of classic shoes such as the Air Force 1 and tried to improve supply chain to boost margins.

"It clearly looks like Nike wanted to bring back somebody with a lot of experience" and "deep knowledge of Nike and its issues - unlike John Donahoe, who came in without any experience in the industry," said David Swartz, senior analyst at Morningstar Research.

Hill will have to "work on repairing some of Nike's relationships" with retail partners who buy Nike shoes at wholesale, Swartz added. "Nike has dropped some customers over the years and pulled back some product and that has created some ill will towards Nike" among sneaker and footwear retailers, he said.

Thomas Hayes, chairman at Great Hill Capital, called Hill a "great pick." Nike now needs to "innovate and repair relationships with wholesalers," he added. Great Hill Capital does not hold shares in Nike.

Born in Austin, Texas, Hill started his Nike career as an assistant in the Memphis, Tennessee, showroom and was soon promoted to a sales position, working out of the Dallas office and calling on mom-and-pop sporting goods stores.

"I had samples with me, and I would call, make appointments, show up at the sporting goods store and present the line," Hill said in a December 2023 podcast interview. "I made unbelievable relationships with some of those people. Even today, I still keep in touch with a few of those retailers." He eventually moved into helping to launch new Nike products.

Nike’s stock market value increased by $11 billion in extended trade on Thursday following the CEO announcement.

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Fashion

Fashion Suppliers Want Brands to Help With EU Green Regulations

An employee arranges bobbins at a textile plant in Haian county, Jiangsu province, China. REUTERS
An employee arranges bobbins at a textile plant in Haian county, Jiangsu province, China. REUTERS
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Fashion Suppliers Want Brands to Help With EU Green Regulations

An employee arranges bobbins at a textile plant in Haian county, Jiangsu province, China. REUTERS
An employee arranges bobbins at a textile plant in Haian county, Jiangsu province, China. REUTERS

As the global fashion industry braces for new green supply-chain regulations, clothing makers in low-income countries like Bangladesh expect major international brands to share the burden. The European Union’s Corporate Sustainability Due Diligence Directive (CSDDD), adopted in July, requires corporations to make their global value chains more sustainable.
The new rules on workers’ rights and emissions could transform the way clothing is made and sold, most significantly in the garment factories and textile mills across Asia that account for much of the sector’s pollution. Bangladesh, the world’s second-biggest clothing exporter after China, in particular needs assistance from major brands as it undergoes a political transition following mass protests sparked by a jobs crisis that ousted the previous government.
"While in Bangladesh we have prepared our mindset and ecosystem for the change, we will need support from our global buyers, as well as our government, to reach the green transition goals," said Abdullah Hil Rakib, managing director at Team Group, a clothing supplier in Bangladesh that employs about 23,000 people. The CSDDD seeks to bring corporate practices in line with the Paris Agreement on climate goals. Major European brands must ensure their suppliers are conducting due diligence to protect workers and communities from the adverse effects of their operations or pay compensation for damages.
For the fashion industry, the onus will mostly fall on factories in places like Bangladesh, Pakistan and Cambodia to find and fill the gaps in safeguarding labor, human rights and the environment, experts said.
International brands must collaborate with these suppliers to adhere to the new rules, according to a study by clothing makers in Asia that was supported by the Transformers Foundation, which represents the denim industry, and GIZ FABRIC, a project from German development agency GIZ to support sustainable textile production in the region.
GROWING COMPLEXITY
The new regulations may provide a chance for suppliers to push for ethical commercial practices and more favorable contracts from international brands, representatives from companies behind the study told the Thomson Reuters Foundation in a joint interview.
But manufacturers are still coming to grips with what measures they must take and how they will finance their portion of the estimated $1 trillion investment required for the fashion industry to transition to net-zero emissions in the coming decades.
Rakib estimated that suppliers will have to make additional investments of 20% to 30% to turn their factories green.
Industry experts warned that the CSDDD will require a raft of legal changes in countries where the products are manufactured.
National legislatures will have to pass laws that line up with the EU directive. Brands must devise their approach to implementing such laws, and courts will need precedents in order to enforce them, said Matin Saad Abdullah, a professor of computer science and engineering at BRAC University in Dhaka who maps garment factories’ compliance on labor rights and environmental standards.
"The path forward is long and complex," he said.
Brands and suppliers have widely differing capacities and plans for meeting what the EU calls “just transition,” said Zahangir Alam, a fashion industry consultant who has worked for three decades with top global brands on labor issues and sustainability.
For example, Sweden’s H&M Group aims to cut carbon emissions by 56% by 2030, while US retailer Walmart’s Project Gigaton seeks to avoid 1 billion metric tons of emissions in its global value chain by 2030.
Smaller producers in particular will struggle to determine which actions they need to take to meet a brand’s particular benchmarks, Alam said.
‘SHARED RESPONSIBILITY’
Industry associations and government agencies can encourage a common approach by companies in the transition to cleaner and fairer practices, said Rakib.
Bangladesh's garment makers' association, called BGMEA, has set up the Responsible Business Hub to provide information to suppliers about the changing regulatory landscape. The group is also creating a platform to facilitate data collection and sharing. But suppliers said they need brands at their side too and that meeting the CSDDD’s requirements is a “shared responsibility,” as the directive mandates.
Brands are often accused of passing the buck to their suppliers when it comes to ensuring a living wage or investing in decarbonization.
To achieve net-zero emission by 2050, the fashion industry will have to invest more than $600 billion to implement solutions that already exist and about $400 billion to develop innovations, according to a report by the Apparel Impact Institute (Aii), a non-profit promoting sustainable investments.
Aii has formed the Fashion Climate Fund, which pools resources from brands and philanthropies, and is working with more than 1,000 suppliers to help them achieve energy and water efficiency, said Lewis Perkins, President of Aii.
Aii acts as a "clearing house" to identify programs and technology for decarbonization and encourage local suppliers to adopt them.
"We have identified 1,500 suppliers with high energy usage and aim to support locally grown decarbonization solutions, when they meet our criteria, prioritized by the suppliers themselves, with buy-in from multiple stakeholders, so that all actors are on the same page," Perkins said.
WORKERS’ VOICES
The EU directive is also aimed at improving labor conditions, requiring businesses to verify workplace safety and allow workers and unions to file complaints about human rights violations with authorities.
Union leaders said they are waiting to see how the changes are put in place to protect workers.
"When the laws kick in, we need clear and simple channels to seek remedy when anything goes wrong - and the Global North should have a roadmap for supporting the upskilling of workers," said Kalpona Akter, executive director of the Bangladesh Center for Workers Solidarity (BCWS).
"Moreover, for all the lawmakers' focus on transitioning to net zero, there should be a comparable commitment on helping workers deal with climate impacts like flooding and heat," said Akter.
Garment-producing countries like Bangladesh could lose $66 billion in export revenues by 2030 due to flooding and heat waves, said reports by the Global Labor Institute at Cornell University in the United States and investment manager Schroders published last year.
Team Group’s Rakib said Bangladesh’s experience making changes to improve conditions for workers and the environment make it well-positioned to tackle the new rules – and ensure it retains its position as a leading producer of the world’s clothing.
"With the strides that suppliers in Bangladesh have made in ensuring workers are safe from fire and electrical risks - and more than 200 green factories making extra savings on energy and water - we will remain a key sourcing choice," Rakib said.