Sign up as a new VIP only at Fabletics.com. All right, who hasn't at some point in their life worn Nike's? Problem is, in the past couple of years, up-and-coming brands have grabbed the collective cool factor. Who better to help Nike grab it back than the World Cup superstars? From Mbappé to Ronaldo and of course, the Terminator, Norway's Erling Haaland, the Swoosh is on the feet of all the giants of global soccer, but now Nike has to score some goals with investors. We take you onto Nike's pitch and to the team captain charged with reinvigorating the iconic brand. Talk about what you face today in the turnaround that people call it. Is it a gigantic Nike-style turnaround, and where do you stand there? Because you had said, look, we're in the middle innings. You said that, I believe, a couple of quarters ago. What would you say you are in now?
So here's what I would say. When we came back, we really focused in on five things. One, the culture here at this company, getting the team rallied around sport. And we've done that, and you'll feel it today. Getting back to creating innovative, coveted product, telling emotional stories, and at the same time cleaning up the marketplace. And I would say we have a really strong foundation from which to grow. Now we have focused back on sport. We're seeing growth coming out of places like running and now football or soccer. And so we're excited about that foundation, and we look forward to the growth from here.
It was during COVID that Nike so-called lost its way, basically flooding the market with too much. And then the previous CEO, John Donahoe, saying, you know what, let's go direct to consumer and not be in stores like Foot Locker. You had already retired by then. Why come back?
Oh, I love a challenge. And I love this place, and this place has given me so much. Not just me, but my family. And, you know, I think we all have choices. We get those phone calls and we can say yes or no. And I chose to say yes. I chose to come back to help reset the foundation, and not only reset the foundation, but set this company up for the next 20 years of growth.
September 13th, Bloomberg has a huge article with John Donahoe's face on it, and it says, 'The man who made Nike uncool.' But six days later, Nike announces that you are coming back. But between those days, what was going through your mind?
I woke up every single day thinking, did I just have a dream or a nightmare? No, no. You know, it's like, is this really happening? Yeah, it was no question, it was a surreal moment for me. I'm a fairly private person, and all of a sudden I was trying to get myself mentally prepared to have this public life that I've never really had at Nike. I was always the number two guy, kind of in the back.
And so was that a shock to you when the phone rang, and who was on the other line?
Well, I actually had lunch with Phil Knight. I was in a wedding down in Palm Springs. I had lunch with him, and we started talking just about what I could help with, and I said, yes, of course I would help. And which I started to do. And then in talking with John and the rest of the board, including Mark Parker, who's our board chair, over a period of months, we decided, hey, rather than just coming back to sort of help out and consult, why don't you come back and be the CEO? And so here we are today.
What's been the hardest part?
Oh, probably for me, the hardest part has been balancing all of the internal and external demands. You know, we're in the middle of a comeback. So I want to spend a lot of time with the team and making sure I'm able to dive deeply into the business and steer and guide. But at the same time, I'm the CEO of the company, so I have a responsibility to lift up, spend time with journalists, spend time with the media, spend time with our investors, spend time with our board. And so I'd say that it's probably balancing that sort of internal and external expectations.
What part of your strategy is really working right now? And yes, I will follow up with what's not really working right now. You give me a cue up ahead of time so your mind starts working.
Without question, it's the focus on innovation and product that's starting to come back. We were very much focused on sportswear lifestyle product, and we shifted the emphasis back to sport. It's what gives us our authenticity and positions us as a sports brand. And so you look at running, you look at football or basketball, business is much stronger today. Our training business is coming. So I would say that's working.
Let me go ahead and give you the what's not. No, I don't... yes, I do.
Well, here's the space that is taking longer than I would like. And this is the impatience piece that you hear me talk about. We had gone so hard at direct to consumer. The reality is consumers want to shop in multiple locations. And we have to show up in meaningful and thoughtful ways in all of those locations, whether it's a sporting goods store like Dick's Sporting Goods, or an athletic specialty like Foot Locker or JD Sports, or you want to go to a specialty store, a running specialty store. We've got to show up there, and getting that shelf space back and having it presented the way we want it presented has probably been the hardest part for us.
And since that shelf space was ceded to others, I'm thinking about running. Yes, Hoka, Li-Ning, the Chinese company which just signed Steph Curry. How hard is it going to be to get that shelf space back?
It is going to require unbelievable product because that's where it all starts. You got to have beautiful product that people want. You got to be able to connect emotionally to the brand and the marketing that we have. And then what I keep telling our teams, we've got to earn it every single day. And the best way to earn back that shelf space is for us to drive better and better sell-through. It's all economics, right? If you can drive more revenue and more margin, you're going to get more shelf space. And so we have to earn it every day. And that takes time.
You have said that you don't really love to follow trends, but you look at, say, for example, the model of Skechers. Skechers doesn't pretend to not follow trends. They look at the trend that's happening, and then they make a sub-$100 shoe. And again, isn't the consumer saying Nike missed the trend over the past couple of years? Basically, validation that you do have to look at trends?
Oh, I think we're at our best when we're setting the trend. But there's no question you have to look at what people want. And I think the basic insight there is comfortable shoes at a, you know, reasonable price point. And our team has done a really nice job. We call it our core consumer business, selling to family footwear, like a Famous Footwear as an example. And the team has done a really nice job of repositioning the brand there and making certain we have the assortment to allow us to compete.
China. How tough is that going to be? The China sales have plummeted. You see any good signs that they're coming back?
