A string of high-profile departures at the leading athletic brand has caused its share of public banter.
The past week alone has seen four Nike Inc. executives exit their roles — albeit with few details emerging from the company as to the nature of each exodus. (Nike confirmed on Tuesday that Vikrant Singh, senior brand director for basketball in North America, and Daniel Tawiah, VP of global brand digital marketing innovation, had left the company. VP of diversity and inclusion Antoine Andrews’ exit was confirmed on Monday, and today the athletic giant revealed that Greg Thompson, VP of footwear, has also departed.)
But despite the headlines the announcements have spurred in recent weeks — they follow back-to-back exits of Nike brand president Trevor Edwards and VP and GM of global categories Jayme Martin in March — at least one analyst believes that the significance of Nike’s shake-ups has yet to be realized by Wall Street.
“You’ve got a $35 billion-dollar brand that is facing all of these departures that weren’t planned,” said Sam Poser, Susquehanna Financial Group LLLP analyst, who today lowered his price target on the stock from $62 to $59. “And while [perhaps] these are talented people — who have been at Nike for years — moving into the [newly vacant] roles, they are now having to do different duties and [work with] different staff. So there’s going to be this huge learning curve at a time when the company really needs to be totally rocking and rolling.”
Over the past two years, Nike has seen some deceleration in its sales — particularly in North America amid a resurgence at Adidas as well as new competition from street brands such as Supreme and Vans.
When news of the first two departures made headlines in March, it was around the same time Nike was due to release third-quarter earnings, and analysts and market watchers seemed to shrug off the news to focus on financial and product-related insights.
Now, as the exits ramp up — insiders suggest that there will be more to come — Poser said it’s time that investors and other stakeholders connect the dots.
“We don’t think they totally get it,” Poser said. ”The Street is looking at good product and all this innovation that Nike has — they’re looking at things that theoretically you can do mass [sales] with. They’re not looking at things that are ‘touchy feely,’ but in my experience, ‘touchy feely’ affects other things.”
The major changes at Nike come at a time when corporations across the country are experiencing heightened pressure to address internal misconduct as movements such as #MeToo bring new attention to corporate culture issues that have become pervasive.
Nike hasn’t publicly stated the nature of its own internal concerns, but CEO Mark Parker last month acknowledged a crackdown on behavior that does not “reflect the core values of inclusivity, respect and empowerment” at the company.
This month, Nike’s chief human resources officer, Monique Matheson, doubled down on Parker’s sentiments, telling FN in a statement that the brand is “committed to creating a culture where everyone can succeed and contribute to our success, and we know diversity drives a culture of inclusion and empowerment.”
As an initial step, Matheson said that for the first time in the company’s history, Nike shared data regarding representation for women and people of color at the VP level. (An internal memo pointed out that 29 percent of the company’s vice presidents are women, even though the company’s global workforce is evenly split between men and women. The figures are available on Nike’s corporate site, along with other data on minority representation at the company.)
And while the company admits it has had some diversity shortfalls, some experts suggest that its recent transparency — and promise to take action — could put it in the good graces of some of its target customers (particularly millennials and Gen Z, who have been major proponents of movements such as #MeToo).
“Today’s consumers demand to know where brands and retailers stand on social issues,” said Matt Powell, senior sports industry advisor at The NPD Group Inc. “If a brand’s values do not align with the consumer’s, the consumer will take their business elsewhere.”
Jeff Van Sinderen, an analyst with B. Riley FBR, shared similar sentiments.
“Companies that do not focus on employee behavioral and cultural issues increase their chances of getting into trouble that could have a far-reaching impact,” Van Sinderen said. “The message is that some organizations need to be more proactive in implementing change along these lines.”
Still, companies will have to grapple with other internal issues if the purported behavioral problems necessitate a major overhaul of the upper ranks.
“Whether [executives who have recently left Nike] are going for the right reasons or the wrong reasons, we’re not going into that, but you have people that were major leaders in the company [suddenly gone], so it just can’t be business as usual,” Poser said.