Group Created with Sketch.
Volume 24 No. 158
  • Created with Sketch.
  • Created with Sketch.
  • Created with Sketch.


          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).