Last Monday’s surprise announcement of Mark Parker’s nomination as Nike’s new chief executive has electrified the troops in America and in Europe. As reported in the last issue, Bill Perez agreed to resign after 13 months in the hot seat as he wasn’t fulfilling the expectations that Phil Knight, chairman and founder of the massive athletic company, had laid on this outsider. Perez agreed to resign from his position without contention, bringing with him a lucrative severance package.
Perez was seen as an executive with a strong background in the multi-brand business who could have pushed the group into uncharted territory, where the Nike brand had already been gaining momentum, while helping to develop its other brands and businesses. Nike has reached record sales under Perez in the USA, but at the expense of frictions in the executive suite on a number of issues. Sources indicate that Perez went against the grain at Nike, for example maintaining that it was important to have good relations with major retailers.
Overall, Knight indicated in a conference call that Perez just didn’t fit into the scheme of things at Nike. He felt that the company was running at 80 percent efficiency under Perez during his learning curve. Insiders indicate that he had trouble understanding the company’s culture well and quickly, delaying the decision-making process. For those who have been in tune with Nike’s business for a long time, it’s no surprise that an outsider had trouble blending into the game plan at the Swoosh.
Perez’ replacement, 50-year-old Parker, is a 27-year veteran of the company. He has earned respect within the group – also in Europe, where he has been often - for his low-key style and for his vision for the Nike brand and for the product. While benefiting the team spirit at the top of the executive team, his promotion may herald a broader group effort in the area of new product development in footwear as well as apparel, which has not been brilliant lately. Originally a footwear designer, Parker earned his marks as the developer of the whole “Air” concept, among other things.
Since 2001 Parker has been acting as co-president of the Nike brand together with another veteran, Charlie Denson, who is one year younger and admired as a top-notch salesman. Responsible also for supply chain management and other operations, Denson has reportedly been acting together with Parker in perfect synch, like the other side of the same brain. There has been no rivalry between the two. Denson, who participated in Monday’s call, made it feel like he didn’t mind letting his sidekick take over the hot seat. He will now be 100 percent responsible for the Nike brand. Knight has yet to pick out a replacement for Scott Olivet, who was in charge of all non-Nike businesses, so perhaps Parker’s first task will be to find one with whom he will be able to work smoothly.
Company officials have no real explanation for Perez’ rather classical statement that he was leaving because he was not in agreement with Knight on the long-term strategies for the group. It’s still a mystery whether they were at odds about investments in other companies, such as Puma.
