NIKE'S WOES CONTINUE TO BE THE FOCUS OF MEDIA ANALYSIS
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).