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.
Sarabande Foundation, the organization established by LeeAlexander McQueen, is set to bring its ‘What Now?’ event back to New York City this May.
Sarabande Foundation returns to NYC. – Sarabande Foundation
Taking place on Tuesday, May 6, at The Standard, East Village, What Now? serves as a bridge between education and the professional world, equipping attendees with the tools and industry insights needed to launch successful careers.
The free event welcomes students, recent graduates, and self-taught creatives, providing them with one-on-one mentoring, portfolio reviews, and a post-event digital ‘Aid Pack’ filled with guidance for navigating the creative industries.
“A huge void exists between the safety of college and the reality of the working world. Particularly in fashion, the preconception and often misconception is that upon graduating your dream job awaits,” said Trino Verkade, director of Sarabande.
“The reality is quite different. But excitingly, on the flip side, the industry is so diverse and so rich in its need. There are numerous alternative models to navigating the industry other than ‘I graduated from fashion design and set up my own label’. What Now? helps people identify that their skillset is much broader than their degree.”
Last year’s event drew hundreds of eager graduates who lined up around the block to meet with 90 industry professionals from 23 globally renowned brands, including Christian Dior Couture, Fendi, Hermès, Khaite, Loewe, Louis Vuitton, Marc Jacobs, Thom Browne, Tiffany & Co., and Art & Commerce.
“I know what I’m looking for in a graduate, and all the brands taking part in What Now? also know what they want. This event provides an incredible opportunity for our next generation of creatives to have direct access to industry leaders from an exceptional group of brands,” added Francesca Amfitheatrof, president of The American Friends of Sarabande and artistic director watches and jewellery, Louis Vuitton.
“Our objective for this event is to advise and educate students on how to put their best foot forward in their career trajectory. Our industry is global, and events like this show graduates not just what’s possible for them, but how to thrive.”
People wishing to book their place should register via Eventbrite.
J.Jill Inc. announced on Wednesday that sales for the year ended February 1 increased just 0.5% to $610.9 million, hindered by a decline in fourth-quarter sales at the U.S. fashion retailer.
J.Jill
The Quincy, Massachusetts-based company said annual comparable sales, which includes comparable store and direct-to-consumer (D2C) sales, increased by 1.5%, with D2C sales, which represented 47.5% of net sales, up 1.9%.
Likewise, fiscal 2024 net income grew to $39.5 million, compared to $36.2 million in the prior-year period.
The firm’s annual sales were, however, held back by a 4.9% decline in fourth-quarter sales to $142.8 million, hit but a 6.8% drop in D2C sales, though total comps were up 1.9% for the three months.
“Fiscal 2024 performance is a testament to our disciplined operating model as we delivered on our objectives while strengthening our balance sheet, implementing robust total shareholder return strategies and investing in new store growth and systems,” said Claire Spofford, president and chief executive officer of J.Jill, Inc.
“Although this year was not without challenges as we continued to navigate a dynamic macro environment, I am proud of all that the team has accomplished enabling us to continue to drive strong cash generation supporting the recent increase of the quarterly dividend and ongoing investment in growth strategies and capital priorities. As we enter fiscal 2025, despite the uncertain outlook near-term with the slow start to Q1 and continued price sensitivity from customers, I am confident in the team’s ability to continue to operate with discipline while positioning the brand for long-term success.”
Looking ahead, J.Jill said it expects fiscal 2025 sales to be up 1% to 3%, compared to fiscal 2024, with plans to open 5-10 stores in the 12-month period.
Swatch Group AG is looking into a potential take-private of the Swiss watchmaker but it will “take time,” according to Chief Executive Officer Nick Hayek.
Swatch
“I have a big hope” the company will find someone to “help take us private,” Hayek said at a media event Wednesday, in one of his strongest suggestions yet that the maker of Omega watches is considering delisting from the stock exchange. Shares of Swatch rose as much as 4.3% in Zurich.
Swatch, whose brands also include Blancpain and Breguet, is frequently the subject of speculation that Hayek will seek to take it private as its stock languishes amid wider concerns about the future of luxury demand. Its shares were down 18% in the 12 months through Tuesday’s close.
Still, it wasn’t immediately clear whether Hayek — who also smoked a cigar at the event — was joking or being serious. His comments came as Swatch attempted to make light of its challenges in another way: publishing its annual report in a format so small it requires a magnifying glass to read it.
The “micro report” reflected Swatch’s “not exactly gigantic figures” last year and its skill at making miniature watch parts, Hayek said.
Hayek, who has had an at-times tempestuous relationship with shareholders, and other family members and related parties control about 44% of the voting rights. He said last year taking Swatch private would be a “nice thing to do,” but indicated he wasn’t willing to take on the debt needed to buy out other shareholders.
Swatch’s performance has lagged recently, affected by a difficult market environment including rising metal costs and weak demand in China due to economic uncertainty.
Though more entry-level brands like Swatch and Tissot continue to perform well, the group’s overall 2024 profit dropped 74.5% to 304 million Swiss francs ($346 million) from a year earlier. Swatch said it decided against cutting staff or reducing production capacities to be ready for an upturn it expects in 2025.
During the event Hayek joked that he hoped Christophe Lovis, a University of Geneva astronomer who presented a session on exoplanets — planets beyond the solar system — would help him find a partner to take Swatch private. He also referenced Elon Musk, the billionaire whose companies include SpaceX.
“I am hoping that Mr Lovis finds somebody on that exoplanet,” Hayek said. “I have a big hope to meet Mr. Musk up there to help take us private, but anyway I will not tell you here — so give us some time.”
Entertainment8 years ago