Elliott Hill has made his strategy for turning around Nike Inc. very clear in his first five months as chief executive officer: return the sneaker giant to focusing on sports, not fashion.
Nike
Hill has reshaped the company’s organizational chart, overhauled the sports marketing unit and tried to rekindle relationships with key retail customers and pro leagues, including the NFL.
“We lost our obsession with sport,” Hill, who returned to Nike after a long run as one of its top executives, told analysts in December. “Moving forward, we will lead with sport and put the athlete at the center of every decision.”
Investors will get an early read on Hill’s progress when Nike reports earnings on Thursday afternoon. Wall Street isn’t expecting much improvement yet. Analysts project quarterly sales sank 11%, which would be the biggest decline since the depths of Covid five years ago.
The company’s shares have fallen for three straight years. That’s the worst stretch in its history, which went public in 1980. The stock is down about 9% since Hill was announced as CEO in September, bigger than a decline of 1.7% for the S&P 500 Index.
Hill, who officially started in October, refocused Nike back on core sports such as running and basketball. The company had spent the past several years pumping investment into lifestyle products – those worn on the sidewalk, not on the court. That strategy initially boosted growth, but didn’t last, leading to a painful year of job cuts and a CEO change.
“Nike sells a lot of products that are more lifestyle than sport, but the brand’s identity is built off what these products can do for you,” said Simeon Siegel, an analyst at BMO Capital Markets. “That has to start and center around sport.”
Nike is also raising its presence in fitness and activewear through a partnership with Skims, the underwear label founded by celebrity Kim Kardashian. The collaboration, announced in February, is expected to release its first line next year.
Adding to Nike’s challenge is widespread uncertainty in the retail industry as brands contend with fallout from President Donald Trump’s escalating trade wars and softening consumer confidence. Several chains have forecast underwhelming outlooks for this year.
Hints about Nike’s sports renewal began to trickle in shortly after Hill was named its next CEO in September. Nike had become reliant on lifestyle franchises such as Air Force 1s, Dunks and Air Jordans. However, they were losing their allure and new product development at headquarters in Beaverton, Oregon, had slowed.
The remaining problem, according to Poonam Goyal, an analyst at Bloomberg Intelligence, is that management must still clear out a pile of unwanted inventory. That’s led to heavy discounts and will hurt in the coming months, she said. Analysts don’t expect the company to return to sales growth until 2026.
Executive Chairman Mark Parker, also a former Nike CEO, told employees in a memo announcing Hill’s appointment that the company needed to realign around product creation and helping athletes reach their full potential. Hill followed by telling staff to expect an “unrelenting focus on our athletes.”
Hill immediately began working to secure Nike’s long-term contract extension with the NFL, which had been considering other bidders for the license to make its on-field uniforms. Then senior management told employees that Nike had begun preparing a global push for its outdoor business, which includes hiking gear like trail shoes and fleece jackets.
Meanwhile, a sports reset took shape as Hill restructured his organizational chart. He segmented Nike’s corporate teams by sport across men’s, women’s and kid’s lines and named basketball, soccer and running as some of the most crucial categories.
Hill also shuffled sports marketing, naming Nike veteran Ann Miller executive vice president of the division. The move, he told employees in a memo, would “empower us to deliver more effectively on our commitment to serving athletes.”
In recent months, Nike has signed agreements with the NFL, NBA, WNBA, FC Barcelona and the Brazilian Football Confederation. It did, however, lose out to rival Puma SE as the soccer ball supplier for England’s Premier League, ending a 25-year partnership.
In December, Hill declared his intention to shift investment away from clicky ads that drive e-commerce traffic to its online shop. He told investors that Nike would “reinvest in our brands” and spend more marketing dollars on major sports moments.
That effort materialized in February, when Nike aired its first commercial at the NFL’s Super Bowl in nearly three decades. It starred many of the company’s top women endorsers: sprinter Sha’Carri Richardson, gymnast Jordan Chiles and basketball stars Caitlin Clark, Sabrina Ionescu and A’ja Wilson.
Hill made the rounds in person too. He flew to New Orleans to host a Super Bowl party. At the NBA All-Star weekend in San Francisco, he promoted a new shoe.
Then, shortly after superstar Luka Doncic, who’s sponsored by Nike’s Jordan brand, was traded by the Dallas Mavericks in a shock deal to the Los Angeles Lakers, the company had an ad for that, too. “Full tank. No Mercy,” it said.
From one executive role for a major value retailer to another, troubled Poundland has appointed former Wilko CEO Mark Jackson as its new chief financial officer.
Jackson is set to join current Poundland CEO Stephan Borchert, Retail Week reported.
Prior to this appointment, Jackson also served as chief financial officer of clothing brand Pep&Co, which is sold across Poundland and Pepco stores. He was also a former CEO of Bensons for Beds.
Poundland’s managing director Barry Williams said of the appointment: “Not only is Mark highly experienced in the kind of processes we’ll be undertaking, he’s also a long-term friend of our business.His experience as a turnaround specialist will be invaluable to us as we move to rebuild the business.”
He added: “We’ve a lot of work to do to get Poundland to a point where we can begin our recovery phase from a tough period—but I know with a clear action plan, the right backing and your support, we will put ourselves in the right position to do exactly that.”
The appointment comes as Poundland recently drafted in advisors at Teneo to oversee the sale of the value chain’s 825 store portfolio.
It was revealed earlier this month that Pepco Group was looking into ways to separate itself from Poundland, which has suffered a decline in sales over the last 12 months.
Premium beauty retailer Space NK is to open at Birmingham’s Bullring, with the brand committing to its largest store outside of London at the Hammerson-operated destination.
To be located on the mall’s Upper Level East, adjacent to AllSaints, Coach, and Dr Martens, the 5,500 sq ft store is set to open this summer as its regional flagship.
There will be a dedicated consultation area for make-up and skincare, with ‘play tables’ for customers to sit independently or with a member of the team to explore the store’s wide selection of beauty brands.
Andy Lightfoot, CEO of Space NK, said: “Our Birmingham community has been very vocal in its wish for us to return, [opening] our biggest store outside of London [it will] be our first standalone store in the city centre.”
Last year, beauty sales at Bullring & Grand Central “grew significantly, making it the best-performing category at the destination”, Hammerson said.
It added that the strength of consumer demand was reflected in the opening of Sephora’s West Midlands’ flagship, complete with the brand’s biggest window façade in Europe, and the regional debut of the K-beauty retailer PureSeoul. They added to Bullring’s “existing critical mass of beauty and wellness”, which includes Boots, Kiko Milano, and Selfridges’ beauty and cosmetics hall, alongside Grand Central’s line-up including Kiehl’s, L’Occitane and MAC.
Paul O’Brien, director of Leasing & Commercialisation at Hammerson, said: “Bullring and Grand Central continues to be the place to go for health and beauty in Birmingham. [Our] strategy of creating best-in-class spaces for international brands seeking a flagship presence in destinations that out-perform is evidenced by Space NK’s decision to open their largest store outside the capital”.
Hammerson added that Space NK’s signing “continues a strong run of key new additions to Bullring”, with Zara opening its significantly upsized flagship last autumn and SDMN Clothing opening its first store outside London.
Online resale platform ThredUp has launched its annual ‘Resale Report’ revealing that the global secondhand apparel market is projected to reach $367 billion by 2029, with a compound annual growth rate (CAGR) of 10%.
Secondhand fashion market to reach $367 billion by 2029: ThredUp. – ThredUp
This year’s report, released in partnership with GlobalData, highlights that the secondhand apparel market outpaced the broader retail clothing market by five times in 2024. The U.S. secondhand apparel market grew 14% in 2024—its strongest annual growth since 2021.
In terms of shopping behaviour, shoppers are increasingly turning to secondhand options in response to economic shifts. In fact, 59% of consumers say if tariffs and trade policies make new apparel more expensive, they will opt for secondhand, a figure that jumps to 69% among Millennials.
With secondhand shopping becoming mainstream, brands are integrating resale into their business models. Ninety-four percent of retail executives report their customers are already participating in resale, a new record high. Likewise, 32% of secondhand shoppers in 2024 purchased directly from a brand, with nearly half (47%) of Gen Z and Millennial consumers doing the same.
Social media platforms are becoming an important driver of resale adoption with 39% of younger shoppers having purchased secondhand apparel through a social commerce platform in the past year. Half of Gen Z and Millennial secondhand shoppers purchased items to create content or share on social media.
Lastly, artificial intelligence is revolutionizing the way consumers shop for secondhand goods. Now, 48% of consumers say AI-powered personalization, search, and discovery make shopping secondhand as easy as buying new. Meanwhile, 78% of retailers have already made significant investments in AI, with 58% planning to launch AI-powered tools in the next year.
“As consumers are increasingly thinking secondhand first, the retail industry is adopting powerful new pathways for resale,” said James Reinhart, CEO, ThredUp.
“From the integration of social commerce and innovative AI applications to the establishment of trade organizations and interfacing with government, it’s clear why resale is seeing accelerated growth and has such a promising growth trajectory.”
Entertainment8 years ago