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NIKE'S WOES CONTINUE TO BE THE FOCUS OF MEDIA ANALYSIS
Published March 24, 1998
Nike's earnings reductions and recent layoffs are examined in this week's news magazines. In TIME, Bill Saporito writes under the header, "Can Nike Get Unstuck?" Saporito: "Nike is a multibillion-dollar monster finding its size awkward." Nike Chair Phil Knight's "challenge is to re-create the essence of the outfit he first operated out of the trunk of his car." Nike "is reassessing everything, from the way it sells to retailers to the number of times the famous swoosh appears on products and in advertising. It will try to act smaller by developing categories such as golf, soccer, and women's as separate business units." Knight: "Basically, our culture, and our style, is to be a rebel, and we sort of enjoy doing that. Now that we've reached a certain size, there's a fine line between being a rebel and being a bully, and yeah, we have to walk that line." Saporito writes that despite "the pounding" it has taken, "Nike is still the force in athletics" (TIME, 3/30). REORGANIZATION: Nike will undergo "a holistic reorganization as it struggles with the very size of the company and what it stands for." Knight: "What we are today might by O.K. for a $3 billion company. It's not O.K. at 9." In reviewing its corporate image, Nike execs "reached an interesting conclusion: too many swooshes." Nike VP Mark Parker: "There has been a little bit of an internal backlash about just the number of swooshes that are out there." Saporito adds that Nike will "try to be more accessible" to consumers by continuing to develop subbrands, such as a golf division built around Tiger Woods and another line, Nike Classic Golf, that will target the country-club set. Saporito concludes that Knight "has written this year off," but by '99 he "expects to have new product, a new management structure and better press" (TIME, 3/30 issue). LOWERED COOL QUOTIENT? NEWSWEEK's Jolie Solomon writes that more than its negative press, "Nike's bigger problem is a 1990s marketing conundrum: can you be big and cool?" When Teenage Research Unlimited did its latest survey, 40% of kids named Nike as one of the "coolest" brands, down from 52% six months ago. But Solomon adds that Nike's "ace in the hole is Knight himself," who she describes as "charismatic and down to earth" (NEWSWEEK, 3/30 issue). In a sidebar, NEWSWEEK's Joshua Hammer reviews Michael Moore's new documentary, "The Big One." Knight "is the only CEO with the guts to go on camera, but he pays the price: he sheepishly admits he's never visited his company's Third World factories" (NEWSWEEK, 3/30 issue). ATHLETE'S FOOT? In U.S. NEWS & WORLD REPORT, William Holstein reports that Knight "remains deeply involved with Nike's athletes, which is one reason it will be hard for the company to cut back on its spending for sports events and sponsorships." But recently departed execs say that Knight's "preoccupation with his athletes, at the expense of shareholders and employees, is a serious problem." Former Nike CFO Robert Falcone said he urged Knight "to cut back on promotion and marketing costs to help offset declining sales. Instead, Knight decided to shuffle management to appease investors." Falcone: "All they had to do was not sign one soccer contract, and they could have saved hundreds of jobs" (U.S. NEWS & WORLD REPORT, 3/30 issue).