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Predicting someone’s firing or downfall leaves us with a bad taste in our mouth. We usually like being right on stuff like potential acquisitions etc.

But sadly, we’re really good at predicting if people are going to get fired. And that’s happened.

John Donahoe is out as Nike’s CEO, and they’ve brought in Eliot Hill OUT OF RETIREMENT to replace him.

This week, let’s give ourselves a reminder on what caused the downfall of Nike’s tech forward CEO.

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What were the failures at Nike during John Donahoe’s tenure?

Here are the greatest hits:

• Core Mission/Messaging

• Product

• Distribution

Core mission/messaging:

Long story short: Nike is losing what made it cool. The enormous growth in recent years means Nike is almost too big to fail. It now markets its products like a lot of traditional, bigger companies where the main message seems to be ubiquity, everywhere-ness, and catering to a broad spectrum of people as to almost have no personality (like Allbirds). Nike still has plenty of personality, but it’s not outshining competitors like it used to.

Product:

Nike doesn’t just have a marketing problem, they also have actual product problems. Nike has had a surprising number of blunders when it comes to its physical product and product curation. They’re just coming off a huge company crisis for shitty uniforms produced for the 2024 MLB season.

Product curation is also becoming a problem for Nike with its excessive re-releasing of limited edition stuff and just flooding the market overall with new types of Jordan brand sneakers. The excess amount of releases makes everything a bit more stale. Sneaker driven events get less special, and we’ve seen SNKRS and Nike shopping have precipitous declines in monthly app downloads over the past 4 years.

Distribution:

Donahoe was originally brought in to help boost Nike’s D2C sales, which had a huge boost during Covid. But a gross miscalculation was made coming out of Covid where the company cut ties with a lot of its department store partners. So when shoppers started returning to stores, Nike’s D2C and overall sales took a huge hit. Since their product wasn’t to be found at the usual suspects.

that’s it for this week.

None of this is investment advice

Have a great week!

Ahmed and Peter