Overview of "Can Nike Make Its Shoes Cool Again?"
This episode of The Journal (The Wall Street Journal & Spotify Studios) explores Nike’s recent struggles and new turnaround plan under CEO Elliott Hill. It covers why Nike’s sales have declined, Hill’s background and strategy, product and innovation efforts at Nike’s Sports Research Lab, and the risks the company still faces as it tries to regain growth and cultural cachet.
Key takeaways
- Nike’s revenue peaked in 2023 (over $50 billion) but has since fallen; the stock is about half its value from three years ago and the company has reported five consecutive quarters of sales declines.
- Major causes of decline: an aggressive direct-to-consumer (DTC) shift that reduced wholesale reach, overproduction of retro/fashion sneakers (notably the Dunk “Panda”), and strong competition from performance-focused brands (Hoka, On, New Balance).
- Elliott Hill — a 37-year Nike veteran who started as an intern — became CEO about a year ago and is focusing on a three-part turnaround: putting athletes at the center, rebuilding retail partnerships, and accelerating innovation.
- Nike is re-organizing by sport (running, basketball, soccer, training) rather than by gender to sharpen product development and in-store merchandising.
- The company is recommitting to wholesale partners (e.g., Foot Locker, Amazon) with tailored assortments for different retail consumers.
- Innovation remains central: Nike’s NSRL (Sports Research Lab) and the LeBron James R&D building show bets on cutting-edge tech (e.g., inflatable climate coats, an “e-bike for your feet,” a calming insole tech called Nike Mind).
- Nike is pushing speed-to-market — the Vomero Premium running shoe was developed in eight months (vs. typical ~18 months) through closer factory collaboration in South Korea.
- Uncertainty remains: market fragmentation, consumer tastes that swung away from retros, and the risk of overcorrecting (swinging the “pendulum” too far toward high-tech performance while losing mass-market hits).
Context — what went wrong
- DTC pivot: Nike reduced wholesale distribution to gain margin and control, breaking long-standing retail relationships. That strategy lowered overall sales volume as many consumers still buy via retailers.
- Retro over-saturation: A flood of reissued classics (Air Jordans, Dunks), especially the ubiquitous Panda Dunk, diluted exclusivity and fatigued sneaker culture.
- Competitive pressure: Performance-running brands with maximal cushioning and comfort gained share amid a running boom and social-media driven trends.
Elliott Hill — leadership and approach
- Background: 37-year Nike veteran who started as an intern; known for emotional attachment to the company and deep internal credibility.
- Public posture: Emphasizes returning Nike to core athlete-first values and making the organization sharper and more product-focused.
- Internal sentiment: Employees reportedly feel more direction and respect his experience, though they acknowledge significant work remains.
Turnaround strategy (what Nike is doing)
Athlete-first organization
- Reorganized teams by sport categories (running, basketball, soccer, training) to focus product development and storytelling around athletes and sport-specific needs.
Rebuilding retail partnerships
- Acknowledges different consumer behaviors across retailers; promises tailored assortments and a thoughtful presence wherever consumers shop (renewed engagement with Foot Locker and Amazon).
Innovation and faster product cycles
- Heavy investment in in-house R&D (NSRL/LeBron building) with engineers, scientists, and designers.
- New ideas range from practical (Vomero Premium running shoe with thick cushioning) to experimental (motorized foot-assist device, temperature-regulating coat, Nike Mind calming insole bumps).
- Process innovation: closer collaboration with factories (example: design team in South Korea) to shorten development time significantly.
Product & innovation highlights
- NSRL / LeBron James R&D building: Nike’s advanced research hub for footwear and apparel innovation.
- Nike Mind: insole “bumps” intended to influence relaxation/focus via tactile stimulation (still experimental).
- Foot-powered motor (“e-bike for your feet”): a motorized attachment to assist movement — pitched for mobility, kids, or lifestyle interest.
- Vomero Premium: thick two-inch midsole, positioned as Nike’s most cushioned running shoe; development compressed to 8 months to accelerate launch.
Risks and open questions
- Market fragmentation: consumers increasingly buy across many brands; recapturing share from Hoka, On, New Balance, Asics is difficult.
- Strategic balance: risk of over-correcting away from the successful retro/culture-driven designs that once drove huge sales vs. leaning too far into niche/high-tech products.
- Execution: success depends on restoring retail relationships without diluting DTC benefits, and on whether new products can resonate broadly enough to drive substantial growth.
Notable quotes / insights
- Elliott Hill: Nike needs to “put the athlete back at the center of everything that we do.”
- Reporter’s framing: Nike’s prior DTC bet “resulted in fewer sales” after cutting ties with longtime retail partners.
- On product development speed: Vomero Premium was made “in just eight months” vs. the typical ~18 months for Nike.
Bottom line / recommendations for listeners
- Nike’s turnaround is real but unsettled: leadership and R&D efforts are convincing many investors, yet the company must navigate a fragmented market and avoid swinging its strategy too far in one direction.
- Watch for: quarterly sales stabilization, renewed wholesale revenue, consumer reception of new performance products (Vomero and other innovations), and whether Nike can balance cultural relevance (fashion/retro) with athletic performance innovation.