Nike CEO Phil Knight "is struggling to rebuild" Nike
from "top to bottom," according to Louise Lee of BUSINESS
WEEK, who examines Nike under the header: "Can Nike Still Do
It?" Nike's announcement last week that earnings would fall
short of estimates resulted in the company's stock dropping
18%, "lopping a stunning $2.4 billion of Nike's stock market
valuation." DLJ analyst Dana Eisman Cohen: "Investors feel
that the turnaround they've been waiting for is being pushed
off again. People are losing patience." Lee writes "that
kind of pressure" has resulted in a "huge attitude
adjustment at Nike's headquarters" in Beaverton, OR. Knight
and President Tom Clarke "have trimmed Nike's payroll by
1,600 or 8%," and the "biggest change" at Nike has company
execs "taking a hard look at costs," as managers have been
told to "hold expense increases at about 3% below revenue
increases." Meanwhile, Nike has replaced "several" execs
with "outsiders schooled at some of the nation's biggest
cooperations," and nine of Nike's 41 VPs have "worked at the
company for fewer than two years, compared with just one of
27 fours years ago." The company's "new team" is "immersed
in the effort to reinvent Nike," with execs "heading
initiatives that include a unit charged with reaching
nontraditional markets, particularly extreme-sports
enthusiasts" (BUSINESS WEEK, 2/21 issue).
BLINDED BY THE KNIGHT: Lee notes that Knight was
"blindsided by the ferocity of the anti-Nike sentiment about
its overseas workers" and the "damage" to the Nike brand
"was real -- and not just on college campuses." Knight: "As
part of our evolution, we've chosen to engage our critics
rather than saying that they're wrong, which is my natural
instinct." Knight "hasn't given up hope" that Nike can
"regain its old stride": "I don't think we're middle-aged, I
think we're in our twenties. I think there is great
opportunity for growth" (BUSINESS WEEK, 2/21 issue). Knight
said he was "really shocked at the adverse reaction" Wall
Street gave after last week's earnings announcement. Knight
said Nike is planning on "becoming more of an international
company" and the WALL STREET JOURNAL's Philana Patterson
adds that the company plans to "continue to work on
exclusive deals with retailers" (WALL ST JOURNAL, 2/14).
