Nike said Thursday that founder Phil Knight is retiring from its board and will become the athletic wear giant's “chairman emeritus.” President/CEO Mark Parker will now also serve as Nike's chairman, completing a succession plan initiated a year ago.
At the same time, Nike said that Apple CEO Tim Cook, who has served on its board since 2005 and leads its compensation committee, would become the board’s lead independent director.
The moves come days after Nike reported a fiscal fourth quarter revenue increase of 6% to $8.2 billion (up 9% excluding currency fluctuations), but a profit decrease of 2% amid flat North American sales.
When Phil Knight and Nike began his leave-taking process a year ago, Knight said, “For me, Nike has always been more than just a company—it has been my life’s passion.”
Indeed, it’s hard to imagine Nike without Knight, who is not only one of the two men who founded the company as an upstart shoemaker in the 1960s, but also the key figure who helped grow it to the sportswear retail behemoth it is today. Knight engineered Nike's transformation from an apparel and footwear maker into an “entertainment” company: He fought to bring on NBA superstar Michael Jordan, for example, launching an enduring footwear brand and award-winning marketing campaign that in turn helped vault Jordan to superhero status and even contributed to the global popularity of the game of basketball.
While other apparel retailers have seen founders leave under difficult circumstances (see: American Apparel), leaving a lot of decision making to private equity firms that don’t tend to have much of a feel for marketing, merchandising or other vital aspects of retail, Knight carefully orchestrated his exit to ensure a seamless transition. Tim Cook has been on Nike’s board since 2005, and Mark Parker was handpicked by Knight himself.
In his comment about Knight’s not-quite-total departure, Parker chose understatement. "Phil’s impact on Nike is immeasurable,” he said in a press release. “His entrepreneurial drive is and always will be part of our DNA. Along with Nike’s exceptional management team, I am committed to leading our next era of innovation and growth as we serve and inspire athletes throughout the world.”
More questions about Nike's future may emerge once Parker’s tenure is over: While he has no plans to leave, there are already murmurs about who might come after him. Nike is also particularly vulnerable to currency fluctuations and even to the recent Brexit vote, and archrival Adidas appears resurgent, enjoying success in its new releases of vintage styles and more casual footwear.
Analysts are even questioning the future of Nike's signature athletic footwear sales. While sales of Michael Jordan shoes rose 18% to $2.8 billion for the fiscal year, Nike brand basketball shoe sales fell 1% to $1.4 billion.