Nike is “unwinding key elements" of CEO John Donahoe's strategy that have “backfired as a growing number of upstarts nip at its heels,” according to Inti Pacheco of the WALL STREET JOURNAL. Since the pandemic, Nike has “lost ground in its critical running category while it focused on pumping out old hits and preparing for an e-commerce revolution that never came.” Current and former employees said that the moves have “eroded a culture of innovation and edginess that made Nike one of the world’s best-known brands.” The strategic missteps have “animated a debate inside the company about its identity.” In its “zeal to boost digital sales,” Nike has “opened itself to competition from newcomers such as On and Hoka, which have borrowed from the playbook that fueled Nike’s rise -- including focusing on sport over lifestyle, and taking risks on innovation.” Nike’s "once torrid growth has stalled.” Sales for Q1, which ended Feb. 29, were "flat compared with a year earlier,” and shares in the company have “declined 24% over the past year.” Donahoe said that Nike is “going through a period of adversity and layoffs that has created uncertainty,” but that the company “will get through it.” However, Pacheco wrote Nike “still dwarfs its competition.” During Donahoe’s tenure, Nike sales have grown 31% to $51B in 2023. That is “more than double the results of Adidas, its closest competitor by far.” New Balance reported sales reached $6.5B last year, and upstart On almost hit the $2B mark (WALL STREET JOURNAL, 4/21).
