By Khadeeja Safdar
Nike Inc.'s longtime leader Mark Parker will step aside as chief
executive and be replaced by a technology industry veteran, marking
a strategic shift atop the world's biggest sportswear brand.
John Donahoe, 59 years old, a former eBay Inc. chief executive
and a current member of Nike's board, will take over as CEO in
January. Mr. Parker, 64, will become Nike's executive chairman. The
four-decade Nike veteran took over the top job in 2006, inheriting
a global brand built by co-founder Phil Knight.
The CEO change comes at a time when Nike's sneaker and apparel
business has been logging strong sales, but the brand has also
faced a series of public relations crises, including the recent ban
of Nike's top running coach amid doping allegations and concerns
about the company's workplace culture.
In a memo sent to Nike staff Tuesday, Mr. Parker said he told
the board he wanted to find a new CEO so he could work alongside
them before retiring. "To be clear, I'm not going anywhere. I'm not
sick. There are no issues I'm not sharing," Mr. Parker wrote.
Last year, Mr. Parker apologized for allowing a corporate
culture that excluded some staff and failed to take seriously
complaints about workplace issues. The apology followed weeks of
turmoil and the departures of several senior executives, including
Mr. Parker's top lieutenant. In response, Mr. Parker said he would
remain chairman and CEO beyond 2020.
The Wall Street Journal had earlier reported that Nike was
investigating allegations of inappropriate behavior after a group
of women at the company circulated a survey that reached Mr.
Parker.
Earlier this month, the Journal reported that Nike-backed
running coach Alberto Salazar briefed Mr. Parker on a number of
occasions about his experiments using a testosterone cream,
according to emails revealed by the U.S. Anti-Doping Agency.
A Nike spokesman said Mr. Salazar was concerned Nike runners
could be sabotaged by people rubbing the cream on them.
Mr. Parker initially sent a memo emphasizing his support for Mr.
Salazar. The following week, he sent a memo to employees saying the
Nike Oregon Project, an elite running group coached by Mr. Salazar,
was being shut down.
A Nike spokesman said the search for a new CEO began months ago
and wasn't triggered by the Oregon Project issue. The board
considered several candidates but landed on Mr. Donahoe because of
his familiarity with Nike and experience running e-commerce and
tech companies, the spokesman said: "John is the right leader, a
proven CEO, who is no stranger to Nike and will help accelerate our
digital transformation."
Mr. Donahoe has a background in the tech world rather than in
sportswear. He was the CEO of ServiceNow Inc., a cloud computing
company, and is chairman of PayPal Holdings Inc. From 2008 until
2015, Mr. Donahoe was eBay's chief executive, where he stepped down
after overseeing the spinoff of PayPal into a separate public
company.
Mr. Parker's tenure has been a financial success. Sales have
more than doubled and Nike's share price has steadily climbed,
giving the company a market value of roughly $150 billion. Nike
dwarfs its rivals, with almost twice as much revenue as main rival
Adidas AG.
The company has been posting strong sales in recent quarters
both in the U.S. and China, its two biggest markets. The growth has
been helped by Nike's shift to sell more of its products directly
to consumers and through its own shopping apps. Mr. Parker also
approved an advertising campaign in 2018 featuring Colin
Kaepernick, the NFL quarterback-turned-activist, that caused an
uproar but boosted sales.
Nike shares, which are trading near all-time highs, were little
changed in after-hours trading after ending Tuesday's regular
session at $95.60.
Mr. Parker, a track athlete at Penn State, joined Nike after
college and landed in the company's R&D lab in Exeter, N.H., in
1979 as a designer. He went on to work with Nike co-founder Bill
Bowerman and remained heavily involved in sneaker design even as he
climbed the ranks at the company.
In 2006, Nike's longtime leader and co-founder Mr. Knight handed
day-to-day management to Mr. Parker, after his previously anointed
successor, an outsider with little experience in footwear, left
after 13 months. In 2016, Mr. Knight retired and handed over the
chairman role to Mr. Parker.
In a statement, Mr. Knight praised Mr. Parker's tenure as CEO
and the appointment of Mr. Donahoe. "They've already worked
together on the board for the last five year," he said. "I'm
delighted Nike is in great hands for its digital future."
Nike's CEO switch came the same day that rival Under Armour Inc.
said founder Kevin Plank would step down as CEO in January. Mr.
Plank, too, will stay on as executive chairman. That means both
U.S. sportswear giants will have new leaders next year as they face
shifting consumer tastes and a difficult retail landscape.
Write to Khadeeja Safdar at khadeeja.safdar@wsj.com
(END) Dow Jones Newswires
October 22, 2019 19:21 ET (23:21 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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