Nike President to Leave as Company Reviews Improper Conduct
Nike’s Edwards, Once Seen as Possible CEO Successor, Is Leaving
(Bloomberg) -- Nike Inc. is reviewing improper conduct at the athletic-apparel giant as one of its top executives steps down, thinning the ranks of prospective CEO candidates.
“There had been conduct inconsistent with Nike’s principles and we are taking the appropriate actions,” spokesman Greg Rossiter said by phone.
Trevor Edwards, president of the company’s namesake brand, is leaving the role and will retire from Nike in August. There have been no direct allegations against the 55-year-old, Rossiter said.
In announcing his exit, Nike said that current Chief Executive Officer Mark Parker will stay in the job beyond 2020, delaying a potential succession contest.
In an internal memo alerting employees to Edwards’s departure, Parker mentioned reports of “behavior occurring within our organization that do not reflect our core values of inclusivity, respect and empowerment,” the Wall Street Journal reported. The memo didn’t describe the complaints or link them to Edwards, the Journal reported. “We’ve heard from strong and courageous employees,” Parker said.
The shake-up comes as Nike tries to cope with a sales slump in its key North American market. Adidas AG has been taking market share, and the industry is scrambling to adapt to shifting buying patterns. To cope, Nike has forged ties with Amazon.com Inc. and is trying to rely less on retailers that are “mediocre” -- a term Edwards himself used.
With Edwards out as steward of the Nike brand, the turnaround effort now falls to the other executives.
The good news is, his departure doesn’t seem to be a sign of “business deterioration,” Wedbush analyst Christopher Svezia said in a report. “We are also encouraged by Mr. Parker’s extended tenure as CEO, which we argue is good for the company.”
Investors were unfazed. Nike’s stock was little changed in early trading on Friday morning, trading up 0.1 percent at $66.44. They had climbed 6.1 percent this year through Thursday’s close, a sign that shareholders are hopeful its comeback efforts are taking hold.
Parker will turn 65 in 2020 and has been in the CEO position for more than a decade. That’s spurred speculation that a changing of the guard was being planned by that year.
Succession Race
Edwards was one of a handful of executives in line to potentially move into the top job. The others include Eric Sprunk, chief operating officer, and Michael Spillane, who oversees design, products and merchandising. Another executive, Elliott Hill, was elevated to the role of overseeing the consumer and marketplace division as part of Thursday’s announcement.
Edwards, one of the highest-profile African-American executives in the industry, will remain an adviser to Parker during the transition. The Beaverton, Oregon-based company didn’t immediately respond to a request to speak with Edwards.
“I am committed to stay in my role as chairman, president and CEO beyond 2020,” Parker said in a statement. “Trevor has decided to retire.”
While Nike could look outside for its next CEO, that scenario isn’t likely. The company took that step once before, when it named William Perez as CEO in 2004 to replace co-founder Phil Knight. Perez lasted less than two years before Knight asked him to resign.
The company then named Parker, a Nike lifer, as his replacement.
--With assistance from Janet Freund
To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net.
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Kevin Miller
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