Nike Reshuffles Executive Team as Possible Layoffs Loom
Sourcing Journal / JULY 23, 2020
Nike is shaking up its executive team as the athleticwear giant continues its efforts to focus on its digital goals. Upon releasing its fourth-quarter earnings report documenting a $790 million loss, Nike unveiled its Consumer Direct Acceleration (CDA) designed to push the business toward its new goal to bring 50 percent of total sales online.
As part of the leadership changes, Nike has appointed Amy Montagne as vice president and general manager of men’s, Whitney Malkiel as vice president and general manager of women’s and McCallester Dowers as vice president and general manager of kids—all of whom will report to Michael Spillane, who becomes president of consumer creation.
The leadership changes are destined to enable a “nimbler, flatter” organization as the focus continues to move toward digital in the wake of changing shopper buying habits due to the COVID-19 pandemic. Nike’s digital sales increased 75 percent in the fourth quarter, including triple-digit growth in May after stores started reopening. E-commerce sales now make up 30 percent of the company’s total sales—a goal Nike initially hoped to achieve by 2023.
“We are announcing changes today to transform Nike faster, accelerate against our biggest growth opportunities and extend our leadership position,” said John Donahoe, president and CEO of Nike in a statement. “Now is the right time to build on Nike’s strengths and elevate a group of experienced, talented leaders who can help drive the next phase of our growth.”
The internal operational model changes designed to fully align with the CDA are expected to lead to a net loss of jobs across the company, resulting in pre-tax one-time employee termination costs of approximately $200 million to $250 million. It is unknown how many jobs will be affected by potential layoffs.
The executive shifts come as Nike aims to simplify its men’s, women’s and kids categories, with the goal to drive even greater specialization through performance sport and sport lifestyle.
Nike also has appointed new leaders for its geographic operating segments, with Carl Grebert becoming vice president and general manager of Europe, Middle East and Africa (EMEA) succeeding Bert Hoyt, who will retire from Nike later this year after 22 years with the company. Sarah Mensah assumes Grebert’s previous role of vice president and general manager of Asia Pacific and Latin America (APLA).
Ann Hebert and Angela Dong will both remain as vice president and general manager of the North America and Greater China geographies, respectively. All geography leaders report to Heidi O’Neill, president, consumer and marketplace of Nike.
Driving continued growth across the numerous other brands in Nike’s portfolio, Craig Williams, president of the company’s Jordan Brand, and G. Scott Uzzell, president and CEO of Converse, join Nike’s executive leadership team, reporting to Donahoe. The Jordan Brand was the biggest success story in an otherwise down quarter for Nike largely due to the airing of ESPN’s “The Last Dance” docuseries, which highlighted the story of Michael Jordan and the 1997-98 Chicago Bulls. Wholesale revenues from Jordan Brand products jumped 15 percent throughout the 2019 fiscal year, making it the only Nike wholesale brand to see a revenue increase.
The athleticwear and footwear company plans on making big changes to its store base as part of the acceleration. Nike plans to open 150 to 200 smaller format “mono-brand stores” across North America and EMEA designed to “integrate online-to-offline capabilities,” with Donahoe hinting during the company’s fourth-quarter earnings call that Nike is looking to use the stores to capture more of the women’s apparel market. Nike operated 384 stores including outlet locations in the U.S., as of its latest annual filing.
Nike plans to open a new regional service center on the West Coast before the holiday season to forward-deploy e-commerce inventory, leveraging advanced analytics and demand-sensing capabilities from the company’s acquisition of AI-based predictive analytics platform Celect.