NKE Nike Inc

By Khadeeja Safdar 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 23, 2019).

Nike Inc.'s longtime leader Mark Parker will step aside as chief executive and be succeeded by a technology industry veteran, marking a strategic shift atop the world's biggest sportswear brand.

John Donahoe, 59 years old, a former eBay Inc. chief executive and a current member of Nike's board, will take over as CEO in January. Mr. Parker, 64, will become Nike's executive chairman. The four-decade Nike veteran took over the top job in 2006, inheriting a global brand built by co-founder Phil Knight.

The CEO change comes at a time when Nike's sneaker and apparel business has been logging strong sales, but the brand has also faced a series of public relations crises, including the recent ban of Nike's top running coach amid doping allegations and concerns about the company's workplace culture.

In a memo sent to Nike staff Tuesday, Mr. Parker said he told the board he wanted to find a new CEO so he could work alongside them before retiring. "To be clear, I'm not going anywhere. I'm not sick. There are no issues I'm not sharing," Mr. Parker wrote.

Last year, Mr. Parker apologized for allowing a corporate culture that excluded some staff and failed to take seriously complaints about workplace issues. The apology followed weeks of turmoil and the departures of several senior executives, including Mr. Parker's top lieutenant. In response, Mr. Parker said he would remain chairman and CEO beyond 2020.

The Wall Street Journal had earlier reported that Nike was investigating allegations of inappropriate behavior after a group of women at the company circulated a survey that reached Mr. Parker.

This month, the Journal reported that Nike-backed running coach Alberto Salazar briefed Mr. Parker on several occasions about his experiments using a testosterone cream, according to emails revealed by the U.S. Anti-Doping Agency.

A Nike spokesman said Mr. Salazar was concerned Nike runners could be sabotaged by people rubbing the cream on them.

Mr. Parker initially sent a memo emphasizing his support for Mr. Salazar. The following week, he sent a memo to employees saying the Nike Oregon Project, an elite running group coached by Mr. Salazar, was being shut down.

A Nike spokesman said the search for a new CEO began months ago and wasn't triggered by the Oregon Project issue. The board considered several candidates but landed on Mr. Donahoe because of his familiarity with Nike and experience running e-commerce and tech companies, the spokesman said: "John is the right leader, a proven CEO, who is no stranger to Nike and will help accelerate our digital transformation."

Mr. Donahoe has a background in the tech world rather than in sportswear. He was the CEO of ServiceNow Inc., a cloud computing company, and is chairman of PayPal Holdings Inc. From 2008 until 2015, Mr. Donahoe was eBay's chief executive, where he stepped down after overseeing the spinoff of PayPal into a separate public company.

Mr. Parker's tenure has been a financial success. Sales have more than doubled and Nike's share price has steadily climbed, giving the company a market value of roughly $150 billion. Nike dwarfs its rivals, with almost twice as much revenue as main rival Adidas AG.

The company has been posting strong sales in recent quarters both in the U.S. and China, its two biggest markets. The growth has been helped by Nike's shift to sell more of its products directly to consumers and through its own shopping apps. Mr. Parker also approved an advertising campaign in 2018 featuring Colin Kaepernick, the NFL quarterback-turned-activist, that caused an uproar but boosted sales.

Nike shares, which are trading near records, were little changed in after-hours trading after ending Tuesday's regular session at $95.60.

Mr. Parker, a track athlete at Penn State, joined Nike after college and landed in the company's R&D lab in Exeter, N.H., in 1979 as a designer. He went on to work with Nike co-founder Bill Bowerman and remained heavily involved in sneaker design even as he climbed the ranks at the company.

In 2006, Nike's longtime leader and co-founder Mr. Knight handed day-to-day management to Mr. Parker, after his previously anointed successor, an outsider with little experience in footwear, left after 13 months. In 2016, Mr. Knight retired and handed over the chairman role to Mr. Parker.

Mr. Knight praised Mr. Parker's tenure as CEO and the appointment of Mr. Donahoe. "They've already worked together on the board for the last five years," he said. "I'm delighted Nike is in great hands for its digital future."

Nike's CEO switch came the same day that rival Under Armour Inc. said founder Kevin Plank would step down as CEO in January. Mr. Plank, too, will stay on as executive chairman. That means both U.S. sportswear giants will have new leaders next year as they face shifting consumer tastes and a difficult retail landscape.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

October 23, 2019 02:47 ET (06:47 GMT)

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