Nike on Tuesday announced that CEO Mark Parker will be stepping down Jan. 13, just hours after Under Armour CEO Kevin Plank announced he would be passing the baton to COO Patrik Frisk.
Nike board member and former CEO of eBay, John Donahoe, will be replacing him, according to a company press release. Parker, who has been CEO since 2006, will stay on as executive chairman, where he will lead the board and "work closely with Donahoe and the senior management team."
Donahoe will maintain his place on Nike's board, where he has served since 2014. He is currently the CEO of ServiceNow and is also the chairman of PayPal.
As a result of an investigation into Nike's corporate culture in spring 2018, then-brand president Trevor Edwards stepped down, who had been viewed by some as a potential successor to Parker. At the time, Nike indicated Parker would stay on as CEO beyond 2020, but this shift to Donahoe pushes that timeline up slightly.
"We view this change as more surprising than UAA's, given that UAA had a successor clearly being groomed (COO Patrik Frisk), and the fact that UAA has had a choppier record of performance of late (making a C-suite "shake-up" less surprising)," Wells Fargo analysts wrote in a note emailed to Retail Dive. They also noted, however, that Nike's investor relations said the CEO change was coming "from a position of strength."
Despite a retail veteran taking the helm, there remains hesitation around Parker's departure, likely because of how well Nike has done under his tenure. Wells Fargo analysts called him "one of the strongest retail executives in recent memory," pointing to a share price that rose by nine times while he ran the company.
"Furthermore, we believe that he has a track record of product innovation and global brand-building that no apparel/footwear executive can match," the analysts wrote.
On the other hand, a departure was not entirely out of the blue. Parker had been at the company for 13 years and a changeover was "likely to take place in the near-to-medium term," Telsey Advisory Group analysts wrote in a note emailed to Retail Dive.
While Donahoe's appointment may come as a surprise for multiple reasons — he has been a board member of Nike's, but not an executive, and has experience running eBay, but not another athletics company — Nike seemed to gravitate toward him for his digital skillset. Parker pointed to Donahoe's strong relationship with the company, but more importantly to his "expertise in digital commerce, technology, global strategy and leadership."
Those skills "make him ideally suited to accelerate our digital transformation and to build on the positive impact of our Consumer Direct Offense." Indeed, Nike has been highly focused on growing its digital business and technological capabilities lately.
The company has placed heavy emphasis on digital, previously saying that it could make up the majority of the business in the future. Mobile is also a big part of that, and in addition to selling through mobile, the retailer has invested in technology to add at-home features like Nike Fit, which aims to pair shoppers with the right size for every shoe.
Even the retailer's brick-and-mortar stores are taking a more app-based approach, including its House of Innovation flagships and Nike Live store concept. In that sense, Donahoe's experience in digital retail is a good fit for a brand focused on growing into that space.