With mounting pressure on CEO John Donahoe, Nike’s precise turnaround plan remains unclear. However, the recent rehiring of Nike veteran Tom Peddie offers more insight into the brand’s future direction.
Nike, now entering its second year of significant decline, is starting to address some of its past missteps. This week, the brand brought back Tom Peddie, a 30-year veteran who retired in 2020, as vice president of marketplace. This move aims to support the ongoing recalibration of its distribution strategy and is one of the clearest indications yet that Nike is reversing its previous strategy of cutting ties with major retailers to focus on direct-to-consumer channels.
Solving distribution may be the easiest of Nike’s challenges. As executives have begun to acknowledge, the key to recovery lies in releasing products that consumers desire, whether through the SNKRS app, Nike stores, or third-party retailers.
Despite these efforts, Nike has warned of a 10 percent drop in sales for the current quarter and expects mid-single-digit percentage declines for the fiscal year ending May 2025. This follows a modest 1 percent increase in its most recent fiscal year. If these forecasts hold true, it will mark Nike’s worst performance in 25 years. The company’s stock has also plummeted over 30 percent this year, closing on Thursday at its lowest price since March 2020.
As Nike navigates these turbulent times, the focus will be on balancing its distribution channels and delivering desirable products to regain consumer confidence and market stability.