ONCE the envy of its competitors, Nike were the pioneers of collaborating with the world’s greatest living sportsman and teams.
Michael Jordan’s stardom brought Air Jordans to the fore, which dominated the sneaker world.
Tiger Woods’ famous red polo emblazoned with the Nike tick was symbolic of golf in the 1990’s.
French football giants PSG’s capsule collection dominated fashion circles and was worn by fashionistas that didn’t even follow the beautiful game – but just wanted to look beautiful.
And Cristiano Ronaldo took over the reins from Jordan as the brand’s face – inking what’s believed to be a lifetime deal. The endorsements from sports superstars were very real.
But, despite being the athletes choice, Nike’s financial outlook appears to be quite bleak.
Back in June, the American sportswear giant suffered its biggest single day drop in share price on record.
The figure, a staggering $28bn, was taken off in market capitalisation over night when the company’s management reported sales to drop in 2025.
New brands like HOKA and On Running took up shelf-store space, as Nike prioritised becoming a digital first company – selling their sneakers on their website and app.
Last month, CEO John Donahoe stepped down from his role and was replaced by Elliott Hill, a one time intern who began his career at Nike in the 1980s.
So, where did it all go wrong for Nike – which, incredibly, still is the biggest sports retailer in the world?
Changing of the guard
In 2020, Donahoe became Nike’s chief executive. He was immediately tasked with revamping their online sales to bring in more digital revenue.
On paper he appeared the right man for the job. Previously, he had worked with eBay, one of the largest ecommerce companies in the world.
The blueprint for Nike’s future was to become a tech company at the forefront of the digital shopping revolution through its website and app.
The high street and departments stores like Macy’s and Footlocker were deemed less important.
This seemed like a masterstroke when Covid hit and retailers were forced to shift to online sales anyway.
As many worked from home, office wear and smart shoes were being buried in wardrobes.
Leisure wear and sneakers, and whatever else was comfortable, became the norm as billions around the world waited with baited breath to what would happen next.
Unsurprisingly, Nike’s profits surged well past projections made.
It was all going swimmingly.
Until…
Buoyed by that success, Donahoe decided to focus all Nike’s efforts on their digital platforms.
Nike’s shoes and clothing was moved out of hundreds of stores, while the brand also cut ties with several sales partners, including JD Sports, Dillards and Urban Outfitters.
Donahoe confidently claimed: “The consumer today is digitally grounded and simply will not revert back.”
However, that strategy backfired when Covid rules were relaxed.
It became apparent that consumers wanted that brick and mortars experience once again when they were allowed back in the shops.
“I think they underestimated the cultural aspect of brick-and-mortar shopping as part of the social life of young consumers,” former Nike employee Daniel Herval told the Money blog.
“Nike thought people had shifted to online, and they’d left the brick-and-mortar experience behind.
“But as soon as things started reopening, the social aspect of shopping, the community bonding aspect of shopping, returned, and Nike weren’t really there.”
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Losing out to competitors
By this time, Nike was beginning to have to share its space with other, newer brands.
Those former sales partners of Nike were now shifting sneakers by On, endorsed by Roger Federer, HOKA, and Asics instead in their stores.
Worse still, they started to look more innovative too in the world of running.
HOKA’s running shoes are light and boast thick foam soles that runners prefer.
On, who patented their own cushioning system technology with their footwear, have also become popular among serious runners and casual joggers.
And dare someone say – Nike have even become less fashionable on the street.
Adidas Sambas and Gazelles have never been trendier, while New Balance’s 990’s are, as the ad said, ‘Worn by supermodels and dads in Ohio.’
Consumer boredom with the brand meant Nike’s famous sneaker sales began to fizzle.
In crisis
In December 2023, Nike’s revenue forecast was lower for the first time ever.
Donahoe revealed the brand would embark on a three-year cost-cutting plan to the tune of $2bn, which included laying off two per cent of their work force.
That created uncertainty among staff, who reportedly lost faith in their leader.
Cutting corners also meant Nike completely forgot about local grassroots running clubs, claimed an article in the Wall Street Journal.
In the summer, Nike cut their revenue forecast once again, which led to that huge stock decline and a $24bn drop in market cap.
A month later, Donahoe was in the firing line again.
“The CEO of Nike doesn’t come from the industry,” former Nike marketing executive Massimo Giunco shared on LinkedIn.
“At the end, he is a poorly advised, ‘data-driven guy.’ ”
When Donahoe announced his departure, stocks in Nike rose by seven per cent.
Now, it’s the turn of Nike ‘lifer’ Elliott Hill to return to the fold and restore its culture through his intimate knowledge.
But, is it a case of too little, too late?
