C-Suite Hiring Trends – Footwear News

Call it the great change of athletic leadership.

CEO changes in the sneaker space are coming fast and furious, reflecting a broader trend in the fashion and retail sector.

Foot Locker, Adidas, Puma, Under Armor and Reebok all have new top leaders on board. (VF Corp. is also in the midst of a CEO search.)

“I can’t remember another time when there has been so much change and so much movement happening at once,” said Matt Powell, a longtime shoe industry analyst who recently launched consulting firm Spurwink River. “Retail is very hard and it’s not getting any easier. Boards feel the pressure to be accountable to their shareholders. That puts phenomenal pressure on CEOs.”

The top job has changed significantly, with every part of the business experiencing dramatic evolution. Additionally, there are some challenges unique to the athletic industry that are coming to the fore just as the new class of leaders is emerging.

The sneaker boom is waning as fashion-forward consumers look for fresher alternatives. And the lack
of market innovation is causing some cashless consumers to hold off on new purchases altogether.

“Retail floors have never looked more tired,” Powell said in a recent LinkedIn post. “There’s nothing to be surprised or excited about in sneaker retail today.”

Additionally, the aggressive move to DTC did not fare well, with some brands failing to recapture sales that previously came from the wholesale business.

How will new CEOs tackle myriad challenges? It remains to be seen, but most insiders agree that change is good.

Women outside the industry are shaking up the C-Suite

When Nike tapped former eBay executive John Donahoe as CEO in 2019, the company sent a clear message: It was time for an outsider to take over as the company moved forward with its digital future.

At the time, it was an unconventional move in an industry that has long relied on its veterans to lead the way.

While Donahoe’s resume didn’t look like most traditional footwear CEOs who spent decades working their way up the ranks, he fit the mold of a male head of an athletic company. But even below the CEO level, Nike has focused on promoting women to key executive roles, including Heidi O’Neill, president of Consumer and Marketplace. And female leaders lead three of the company’s four regions.

Now all signs point to a tipping point in women’s athletic leadership. In the past six months alone, both Foot Locker and Under Armor have looked outside the industry for their new female CEOs, heralding a new era. The moves reflect a larger shift in corporate America. Five new female CEOs of Fortune 500 companies took office since January 1st, tipping the percentage balance to more than 10% of the total.

Just last week, former Marriott International Inc. president Stephanie Linnartz took the CEO reins at Under Armor — succeeding longtime footwear chief Patrik Frisk — after 25 years at the hospitality giant.

“It’s an opportunity for us to have someone who thinks about this business in a clean way,” said Kevin Plank, founder, executive chairman and chief brand officer at Under Armour. “We have industry experts at (the company) — people who understand a lot of pieces — but it’s time to step up the game. You’re going to see another Under Armour.”

Linnartz’s track record of running a global business — Marriott has nearly 8,200 properties and 30 brands worldwide — and building the Marriott Bonvoy loyalty program was very attractive to Plank.

“He loves playing on a big stage and we think we can have a much bigger footprint,” the founder said. “He’s being handed a company that’s in great shape. He is healthy, he is strong. We’ve gone through a restructuring, we’re ready to run and play offense.”

The CEO of Foot Locker Inc. Mary Dillon (L) and non-executive chairman Dona Young.

CREDIT: Courtesy of Foot Locker

Foot Locker is also making major moves under Mary Dillon, who took over from CEO Richard Johnson in September amid a changing of the guard at the sports retailer. (Donna Young replaced Johnson as president in January.)

Tom Nikic, senior analyst at Wedbush Securities, wrote in a recent note to investors that all nine executives who presented at Foot Locker’s 2019 analyst day are now gone, indicating “how much fresh perspective was needed “.

Dillon, who declined to comment for this story during a quiet period, has been heralded as a transformational leader at Ulta Beauty.

Nikic praised her ability to connect with the beauty brand’s consumer “again and again” through a strong loyalty program, eye-catching marketing and a robust omnichannel experience.

At Foot Locker — which has been in turmoil as a result of Nike’s decision to sell less to the retailer — Dillon’s first order of business was to streamline operations and cut costs.

In January, the retailer said in an SEC filing that it would eliminate an undisclosed number of “corporate and support roles,” which the company expects to represent about $18 million in cost savings on an annual basis, beginning in fiscal year 2023. Foot Locker is also discontinuing its Sidestep banner in Europe, which represents about 80 stores, as it focuses on its core banners.

As market watchers eagerly await Dillon’s next move, they are pushing for more companies to look outside of fashion and footwear for their next CEOs.

Kyle Rudy, senior partner at executive search firm Kirk Palmer Associates, noted that while there have been several out-of-the-box top executive appointments over the past year, the vast majority of new athletics CEOs — including those
from Adidas (Bjørn Gulden), Reebok (Todd Krinsky), Asics (Yasuhito Hirota) and Puma (Arne Freundt) — are all men and all have previous footwear experience.

What he’s more excited about are the dramatic changes he’s seeing among top marketing executives. Kirk Palmer tracked CMO appointments at seven firms, including Jordan Brand, Saucony and Dr. Martens in 2022. More than 70 percent of that group were women. And 57% of those came from outside the industry.

“The emerging profile of the new footwear marketing director reflects a desire to seek diversity of thought and diversity of background,” said Rudy.

Case in point: Jordan Brand brought in Shannon Watkins from Aflac Inc. The influential black marketing executive previously brokered a major deal between the insurance company and ESPN’s College Gameday.

“If you look outward, you get people who bring experience from other sectors of the business that can help us in footwear (recognize) how much the consumer has changed,” Rudy said.

A fresh model

With increasing challenges for the sports business, market watchers believe now is the time for reinvention – and the new class of leaders will be a crucial part of the equation.

“The business model that we run, at least from an athletic standpoint, is really identical to the one that (Nike co-founder) Phil Knight started 50 years ago. We are still buying in the future. The margin structure has not changed,” observed Powell. “This is the time for companies to ask themselves what they want to be and not do business as usual. I hope people take risks.

Nikic agreed that fresh thinking is crucial and also alluded to the brand’s punishing production times.

That’s why it might take longer to see changes from the brand.

Adidas CEO Bear Gulden, who previously ran Puma, at FNAA 2019.

CREDIT: Andrew H. Walker/Shutterstock

“These CEOs need to come in, get their feet wet and work with product and design teams and manufacturing partners,” the analyst said. “What you can do in the meantime is block and tackle. We’ve had so much chaos in the wholesale channel – let’s make it normal again.”

For Adidas, it could be a long time before the company sees “normal” again as Gulden and the German giant grapple with the loss of its Yeezy business following its split from Kanye West.

Gulden, who has achieved impressive growth at Puma during his tenure there, was candid about his new company’s bleak predictions for 2023, calling it a “year of transition”.

Powell believes the unrest will extend far beyond the walls of Adidas.

“The athletic footwear business is going through a massive reset in terms of both assortment and segmentation,” he said. “Sneaker walls will look very different in two years than they did two years ago.”

Will the C-Suites look very different too?

– With contributions from Peter Verry

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