September 27, 2024 • 20 mins
John Donahoe, former CEO of Nike, resigned last week with Elliott Hill to take over. Nike has been seen an uncool brand over the last year, but will this change in CEO get that back to their perceived legendary status?
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Nike has changed its CEO andstock prices have soared.
Does it really matter?
And what does it mean for the future?
We're going to discuss it thistime on fire footwear.
(00:28):
Welcome back to Fire Footwear, everybody.
As always, this is your host,Matt Fraitzen.
I hope that this finds youwell, and I want to thank you for
coming back to this podcast.
Over the last couple of weeks,we've seen a little bit of a surge
innew listeners and new consumers of
the content.
So I'm always flattered bythat, always humbled by that.
So thank you very, very much.
And also at the top, I shouldmention I was able to record with
some new friends, this time from
Canada, the in kicks we trust podcast.
(00:54):
They were good guys.
Trevor and Kevin were reallygracious to have me on their platform.
I had a great time.
So hopefully that will becoming out soon.
But always support the peoplewho support me.
Go to them on whatever podcastapp that you use and type in in kicks.
K I x we trust and hit follow,because honestly, we all need to
support each other in the sneaker
community.
(01:14):
So Nike has changed their CEO.
It was announced last weekthat John Donohoe was stepping down
as Nike CEO and he was going to be
replaced.
And I think a lot of peoplefelt a certain way in the sneaker
world.
But I wanted to talk about ita little bit because I think what
has happened recently, and I think
this happens because I believe that
sneaker people, people like us, I
think we kind of assume that companies
like Nike, Adidas, Puma, all of those
sneaker companies that are giving
usthe heat that we're constantly picking
up, I think we assume that they exist
to placate sneaker culture.
(01:51):
You saw this whenever air cameout in 2023, a lot of people, a lot
of sneakerheads were saying that
there wasn't enough sneaker history,
there wasn't enough for them, when
really, the movie is not for you,
the really, the movie is for the
general public.
And so Nike is one of thosecompanies that I think falls into
this category.
And I honestly think they fallinto this category more so than others.
The reason being is becausesneaker culture is so big now, but
Nike does so much more than just
make sneakers for sneaker culture.
(02:18):
They didn't start out thatway, and they certainly don't just
do that.
They do a lot of things.
They provide athletic apparel,athletic gear for so many professional
teams, the US Olympic team.
They are an internationalbrand that does so, so much.
And so when the CEO getschanged over, I think it's obvious
thata lot of people are missing the point
that it's not just about what does
it mean for sneaker culture.
(02:42):
It means for a lot ofdifferent things.
But I also think that there issort of this unfair narrative going
around sneaker culture about John
Donohoe's leadership and about his
time there.
Because once again, there isthis disconnect between what people
think and what is actually the truth.
And there are highs and lowsto his leadership.
And I think that it's onlyfair that we kind of go over some
ofthose because many people are taking
aVictory laugh thinking that this
means that the company is going to
be cool again.
(03:08):
Let's be clear.
John Donohoe is not in thatposition to keep Nike cool necessarily.
He's there to make sure that acertain amount of people make a lot
of money.
That's himself included.
And so the CEO is incentivizedto go in there and basically make
sure that the bottom line continues
tocreep up and up.
And sometimes that comes atthe disservice of your consumer.
(03:31):
But if we're looking at thehighs of his tenure now, we should
also start by saying his tenure went
from 2020 to 2024.
And I feel like when you saythe year 2020, it's very triggering
for alot of people.
And that's because that wasthe pandemic.
It was a really difficult timefor a lot of people, but it also
served as a really high profile time
for sneakers in general because the
pandemic, one of the things that
itdid outside of obviously spreading
the coronavirus.
(03:58):
But the other thing that itdid was it made it feel as if resources
were scarce.
First of all, time with ourloved ones was scarce because we
weren't leaving the house, at least
most of the time.
Toilet paper was scarcebecause people were just going to
the stores and almost stealing it
at some point.
And sneakers became somethingthat people gravitated toward because
of the last dance documentary.
(04:18):
And because of that,obviously, prices went up.
But there were a lot of highprofile sneaker releases in that
four year period.
And you also have to remember,right before that period happened,
KobeBryant passed away.
So obviously there's a lot there.
Off white.
Off White was something thatwas huge prior to the pandemic.
And then, of course, VirgilAbloh suddenly passes away in 2021.
(04:40):
And so you see all of thesethings happening that make it a little
bit difficult for sneaker culture
because a lot of their quote unquote
cash cows have now left this earth.
And so they have to figure outa path forward.
And we saw even off white havea little bit of an imprint with the
50 dunk collection.
And we saw the dunk low pandahave its moment in the sun.
Now, it's something that youcan easily get, but at the height
ofthe pandemic, at the height of resale,
it was something people were going
tothe replica market for.
(05:07):
It was that popular.
Of course, you saw a lot ofclassics come back over the years.
The Air Max 90 bacon.
You saw a ton of Kobe's comeback.
The partnership between Kobeand Nike was reinvigorated.
Vanessa Bryant bringing it back.
And so for a lot of people,there was a lot of good shoes to
be had.
And over the years, though, upuntil very recently, resale prices
went from the highest they've ever
been to almost back down to what
they were pre pandemic.
(05:34):
For some shoes, it's not the truth.
Obviously, Kobe's are going tocontinue to sell because of his legacy.
He's no longer here.
So a lot of people want apiece of that legacy.
But there has been a lot to behad in that time period.
And I think people kind offorget that because the oversaturation
makesus forget that.
There has been a lot of heat,a lot of retros, a lot of really
quality releases.
(05:54):
Resurgence of new people likeAmma moneyer on the scene.
And I think that a lot of thathas caused sneaker culture to be
in a really good place today.
But if you also look at someof the business decisions, we're
talking direct to consumer strategy
now,this one, in some ways, I think that
it's good because I think you want
to have a direct line to your customer.
Obviously, if you're creatinga business, you want to be able to
be seen giving the product to your
customer.
(06:19):
And when you have middlemen,when you have businesses that are
in the middle, it can make it so
that costs are a little bit bloated
because you're obviously giving it
to another company who then you have
to figure out percentages and things
of that nature.
But also a lot of thosebrands, we're talking foot locker.
A lot of those brands had anostalgic pull to a lot of people
inthe culture.
I remember being a young kidand going into foot locker all the
time because it was the sneaker store
that was in the mall that I went
to.
(06:45):
That's where I saw my firstReebok pump.
That's where I saw a lot ofshoes that I really wanted that my
mom just wouldn't get me.
So I have memories there.
And a lot of people, that wastheir accessibility.
It was an access point to beable to get shoes, because going
online now, there are so many people
going after these shoes on release
daythat it's very difficult.
I did an episode aboutsneakers and how there's so many
people going after every single hype
release that people don't realize
thatit's all about numbers.
(07:11):
It's just too many peoplegoing out for shoe that they just
did not make enough supply of.
And really they can't makeenough of a supply of it.
So while going direct toconsumer obviously was meant to build
direct relationships with its consumer,
Ithink it did put a strain on traditional
retail partnerships that really,
again,in the sneaker market specifically,
had avery high level of nostalgia and
people wanted to go there.
(07:33):
So while they were trying to,again, make it more direct, I think
what they did was take away some
access points for people.
Also in this timeframe, Nikewas focused on sustainability initiatives
and we're talking about reducing
theircarbon footprint.
And that's when they startedto get into a lot of the things like
the Nike space hippie line, and they
started using recycled materials.
(07:53):
You started seeing therefurbished line, using the recycled
boxes, things like that.
I mean, there's something tobe said about that long term for
the company, but a lot of people
didn't see how it translated to sneakers.
And I think a lot of peoplefelt like refurbished shoes or sustainable
materials made it feel like sneakers
were less than what we normally would
get.
And honestly, as a culture,we're already pretty critical about
what kind of materials are used,
thekind of quality we get, the QC, stitching,
glue, stains, all that stuff.
(08:20):
So while the idea ofsustainability as a company is a
good thing, I think it fail to translate
to a quality product, at least in
the perception of sneaker culture.
And then, of course, Nike hasbeen known for technological innovations
throughout its entirety.
And while maybe they are alittle bit behind when it comes to
certain innovations in design, I
think when it comes to technological
advances, they are still kind of
in that space of being near the top.
(08:44):
And one of the things thatstands out to me is the Nike go fly
ease.
Now, the fly ease hasn'treally caught on as this mainstream
shoethat people are wearing, but I think
that the idea behind it of making
it alot easier, a hands free shoe designed
for accessibility, I think that is
a great, great thing.
And I do believe that we needto be thinking about people in the
culture and just people who are wearing
shoes in general, who maybe don't
have the, the privilege of having
twoarms or the privilege of being able
to tie their shoes.
(09:12):
And so I think that wassomething that happened in that time
period that was a really great thing.
Of course they were trying tohit on the NFT market which had this
moment but has kind of come down
to earth.
And so they started makingsneaker nFts and things like that.
All of that was really a fad.
But I think that kind ofsummarizes the highs.
And obviously I didn't hit allof them.
But Nike wasn't exactlydormant during this time period.
(09:34):
Unfortunately though, you arejudged a lot of times by what did
you do for me lately?
And that's where the lows come in.
So let's talk about some ofthese supply chain disruptions.
Covid-19 I talked aboutresources being scarce and that really
was a reality for so many people
andhonestly so many things.
And we're talking aboutfactory related shutdowns in Southeast
Asia due to the Covid-19 pandemic.
(09:55):
And we saw a shortage of somany materials, so many things that
really caused supply chain issues
towhere this direct to consumer idea
was even halted further because they
couldn't get shoes out.
And so while there was aperceived lack of resources across
theworld, in many places there was a
lack of resources and there was disruptions
in getting the products to their
consumer because even if you go direct
to consumer you still have to have
an avenue to get it to your consumer.
(10:22):
You still have to have anavenue to get the material source,
the materials.
And I think that was somethingthat happened during the pandemic
thatNike really had a hard time with.
They weren't the only ones,but obviously it made people feel
asif they weren't as high priority
forNike in terms of sneaker culture.
And then of course you getthis direct to consumer strategy,
whichis something that I said was both
apro and a con.
(10:43):
And they certainly wereaggressive in pushing this out.
And I honestly believe thatone of the things that happened is
obviously they took away access points,
they obviously took away nostalgia.
But I think that Nike'saggressiveness and trying to push
this so hard and pushing out so many
retailers that had been so critical
inmaking Nike the brand that they are
today.
(11:03):
I honestly believe that itcreated so much tension in the wholesale
market, it contributed to some product
availability and consistencies.
And I think people kind offelt like Nike was doing this and
they weren't doing it with us in
mind.
They really weren't doing itwith the consumer in mind, because
onits surface, when you cancel out
the foot lockers and the foot actions
and the east bays and so forth, what
you've done now is you've basically
madeit known that these companies don't
matter, these stores don't matter.
(11:29):
And so for a lot of people,that perception gets put on them
andthey think, well, I don't matter
because that's where I would go or
that's where I would shop for shoes.
And so I think it made Nikefeel or seem a little bit ruthless,
alittle bit lethal in their approach
because they're trying to push them
out as hard as possible.
And I think all of these camedown to you also had some labor practices
and criticisms about how they would
go about that.
(11:52):
And despite efforts to kind ofimprove some of them, they continued
toface criticism for working conditions
inoverseas factories.
And we're talking aboutfactories that were affected by the
pandemic.
Vietnam, Indonesia, I talkedabout supply chain issues.
And obviously all of thatcomes together for Nike to have a
hard time of it, even though resale
prices were going up, I think behind
the lines, behind the scenes at Nike,
they were having a tough time.
(12:17):
And all of this comes down tothe lowest of the lows.
This is the low that almostevery single person I've talked to
has actually pointed to directly
as towhy John Donahoe's time was a failure
and it was Nike stock performance.
I should note that during theheight of the pandemic, when the
stock market here in the United States
crashed all the way down almost to
rock bottom, I became a stockholder
of Nikebecause the stock dropped so much,
Iwas able to get in at a really good
entry point.
(12:43):
And over the course of thepandemic, while I was sitting here
internally complaining about resale
prices and about the lack of availability
for shoes, my Nike stock was going
uplike crazy.
And it had peaked at a pricethat was almost double what I paid
for it.
And now you're looking at itwhere it's barely over what I paid
for it.
And unfortunately for ussneakerheads and the sneaker community,
asmuch as we want to think that Nike,
Adidas, Puma, Asics, new balance,
thatthey're all out for us, out for the
culture, they're out for the bottom
line.
(13:14):
And when you're a publiclytraded company, your stock performance
isthe metric that everybody sees.
And so when you see that stockprice continue to go down, continue
togo down when they are trying to have
shoes more available, but they're
notselling out the stock price continues
togo down.
This is unfortunately a directreflection on your CEO.
And for John Donohoe, that wasthe last straw to see it go down
topandemic levels.
(13:36):
Think about that, folks.
When the stock market in theUnited States crashed so hard that
so many stocks were so available
and sodown, for Nike to go back to those
levels, that was a different time
inthis country.
That was such an unstable time.
And normally the stock marketcrashes that hard because of really
catastrophic events, events that
really can't be foreseen.
Think about 2008, when thestock market crashed and now you
have a CEO who is lording over a
company that has a stock price that
not only hasn't recovered, but has
doubled and gone right back down.
(14:08):
And you just can't have that.
The CEO gets paid a lot ofmoney and they get paid a lot of
money to make other people a lot
of money.
And so when your stock pricefalls by almost 50%, the board of
directors is just not going to sit
for that.
Because those people, that'stheir livelihood on the line.
And yes, they make a ton ofmoney regardless of what the stock
price is for nike.
(14:29):
So I'm not sitting here sayingthat you should feel bad for them
orthat I personally have sympathy for
them.
What I am saying though iswhen it comes down to it, your company
has to perform.
And if it's not performing,you, the CEO, are the one that is
going to get fired.
And so they have now moved onto Elliot Hill.
Now Elliot Hill has had anextensive tenure at Nike.
(14:50):
He has been at the companysince 1988, but he's held various
leadership roles at the company.
He played a crucial role inexpanding Nike's presence in North
America and in Europe.
And that's really big becauseNike obviously being the global brand
that they are, they needed touch
points to be able to do that.
From 2018 to 2020, he was thepresident of consumer and marketplace
andhe was responsible for overseeing
theirglobal marketing strategies, their
retail operations, their overall
consumer engagement.
(15:17):
And that's where I think thesneaker community feels like maybe
Nike is lacking these days in that
consumer engagement.
Because a lot of people wantto feel like Nike is listening to
their complaints and listening to
what they want and in some ways they
are.
In some ways they are not.
But what you saw during histenure in those positions is Nike's
revenue and market share grow, pushing
the company past $39 billion in annual
revenue by 2020.
(15:41):
So the company was doingreally well by the time that John
Donahoe became the CEO.
So it's not as if Nike washurting and all of a sudden John
Donohoe made it worse.
It's just these things ebb and flow.
He has been key to theleadership and global expansion,
like Imentioned, instrumental in driving
Nike's global expansion endeavors,
especially in emerging markets.
And they built localizedstrategies that deepen consumer loyalty
across regions.
(16:04):
And while I think that this istrue across the board, I think that
there are some people who feel that
Nike has not been loyal to them.
And so you're not seeing that.
But now he's going to take onthe CEO role and he's going to basically
come back in October of 2024.
It's his first time in the topleadership role and he's going to
be tasked with navigating the next
phase.
And that's why I ask you, whatdoes it mean for the future?
(16:26):
Well, the first thing that yousee is that Nike has decided to take
back and delay the Jordan one reimagined
black toe.
I think that's a sign ofthings to come because I think what
they saw was, hey, wait a minute,
wehave the black cement threes coming
out and now we're going to put this
piece of history.
I think they're going tospread things out of.
I was reading the other day onsole Savvy's website that they're
nowgoing to be stopping production or
pushing back production of a lot
of shoes.
(16:50):
They're going to be producing less.
They're going to make it seemas if there is less to be had.
They're trying to drive up hype.
And as much as we all hatethat, it's what is going to keep
sneakers alive.
Resell, at some point in hypeis going to have to buoy this market.
And I think that people aredisappointed with that because right
now is the best time for sneakers
because almost everything is available.
(17:12):
But that means that there's no hype.
That means that there'snothing to sustain it into the future.
And I think that Elliot Hillis going to look at this and he is
going to try to get Nike back on
the map.
They are perceived as beingnot cool right now and they just
cannot have that.
Nike needs to get back.
They need to grow their stock,they need to make more money, and
they're going to do that off the
backs of athletes and they're going
to do that off the backs of sneaker
culture.
(17:34):
Before we get to the end ofthe episode, though, as always, I
have a release of the week for you.
Release of the week where Ilike to give you a shoe that catches
my eye.
(17:56):
It's not always hype.
Sometimes it is.
It's just something that Iwant you to know about.
This is a shoe that I haveseen a lot of people talking about
onsocial media, specifically Instagram,
butit is on September 30, 2024, the
Nike Air Max 95 erosion.
The Air Max 95, as I said, isone of those if you know, you know,
kind of silhouettes.
If you grew up with it, if yougrew up wearing it, you know how
fire it is.
(18:19):
Maybe if you haven't seen itbefore, maybe if you're not familiar
with it.
It doesn't seem like it'ssomething that fits in today's aesthetic,
today's society.
But this rosen shoe with twodifferent shoes, with the colors
thatit has, that muted, earthy palette,
Ithink it's actually beautiful.
It's really awesome.
I won't be going out for itbecause I've copped enough this year.
I see a lot of hype for it.
(18:39):
I see a lot of people talkingabout it.
The thing is, though, this isnot going to be like a hyped release
inthe same way that you'd see a Travis
Scott.
This is just a very beautifulshoe, at least from the pictures.
It's part of the city pack andI think it's just a great, great
addition to the Air Max 95 lineup.
We've seen some awesome oneswith that Toronto release a couple
ofweeks ago.
So we got two fire air Max 95sright in a row.
(19:01):
And I believe that that isyour time to cop one.
If you do not have one, and itis a beautiful one, it's perfect
for fall.
It's perfect for.
Honestly, it's perfect for any time.
So if you need an Air Max 95in your collection, that is the time.
Do you, as sneaker culturecare about CEO's and do you think
that this changeover is going to
make things better for the culture
ordo you think it just doesn't matter?
I would love to know.
(19:22):
Call the fire footwear hotline.
Give me a sneaker story.
Give me your opinion.
I'd love to play it on afuture episode.
And that is for your us callers.
Area code 202-643-9170 ifyou're international, just make sure
you get that plus one country code
in there.
I love to hear from all thepeople who are part of sneaker culture.
You can find me on Instagram.
(19:42):
The handle is I rfootwearpod.
If you want to see reels, youwant to see videos, you can find
meon TikTok you can find me on YouTube.
Fire footwear sneakers talkwith Matt freights what you would
search if you go to YouTube.
I'm just shy of 1400 subscribers.
Please hit like please hit subscribe.
It would mean the world to mebecause I'm trying to do some different
things out there.
Hope this finds everybodywell, fam, I hope this finds everybody
safe.
(20:04):
And as always, I will talk toyou next time.
This is fire footwear.
(20:26):
The opinions and viewpointsexpressed on fire footwear are those
of Matt freights and his guest, and
not necessarily those of the Matti
Ice media network.
Fire footwear is exclusivelyowned by Matt Freights and is brought
to you by the Matti Ice Media Network.
Nike has changed its CEO andstock prices have soared.
Does it really matter?
And what does it mean for the future?
We're going to discuss it thistime on fire footwear.
(00:28):
Welcome back to Fire Footwear, everybody.
As always, this is your host,Matt Fraitzen.
I hope that this finds youwell, and I want to thank you for
coming back to this podcast.
Over the last couple of weeks,we've seen a little bit of a surge
innew listeners and new consumers of
the content.
So I'm always flattered bythat, always humbled by that.
So thank you very, very much.
And also at the top, I shouldmention I was able to record with
some new friends, this time from
Canada, the in kicks we trust podcast.
(00:54):
They were good guys.
Trevor and Kevin were reallygracious to have me on their platform.
I had a great time.
So hopefully that will becoming out soon.
But always support the peoplewho support me.
Go to them on whatever podcastapp that you use and type in in kicks.
K I x we trust and hit follow,because honestly, we all need to
support each other in the sneaker
community.
(01:14):
So Nike has changed their CEO.
It was announced last weekthat John Donohoe was stepping down
as Nike CEO and he was going to be
replaced.
And I think a lot of peoplefelt a certain way in the sneaker
world.
But I wanted to talk about ita little bit because I think what
has happened recently, and I think
this happens because I believe that
sneaker people, people like us, I
think we kind of assume that companies
like Nike, Adidas, Puma, all of those
sneaker companies that are giving
usthe heat that we're constantly picking
up, I think we assume that they exist
to placate sneaker culture.
(01:51):
You saw this whenever air cameout in 2023, a lot of people, a lot
of sneakerheads were saying that
there wasn't enough sneaker history,
there wasn't enough for them, when
really, the movie is not for you,
the really, the movie is for the
general public.
And so Nike is one of thosecompanies that I think falls into
this category.
And I honestly think they fallinto this category more so than others.
The reason being is becausesneaker culture is so big now, but
Nike does so much more than just
make sneakers for sneaker culture.
(02:18):
They didn't start out thatway, and they certainly don't just
do that.
They do a lot of things.
They provide athletic apparel,athletic gear for so many professional
teams, the US Olympic team.
They are an internationalbrand that does so, so much.
And so when the CEO getschanged over, I think it's obvious
thata lot of people are missing the point
that it's not just about what does
it mean for sneaker culture.
(02:42):
It means for a lot ofdifferent things.
But I also think that there issort of this unfair narrative going
around sneaker culture about John
Donohoe's leadership and about his
time there.
Because once again, there isthis disconnect between what people
think and what is actually the truth.
And there are highs and lowsto his leadership.
And I think that it's onlyfair that we kind of go over some
ofthose because many people are taking
aVictory laugh thinking that this
means that the company is going to
be cool again.
(03:08):
Let's be clear.
John Donohoe is not in thatposition to keep Nike cool necessarily.
He's there to make sure that acertain amount of people make a lot
of money.
That's himself included.
And so the CEO is incentivizedto go in there and basically make
sure that the bottom line continues
tocreep up and up.
And sometimes that comes atthe disservice of your consumer.
(03:31):
But if we're looking at thehighs of his tenure now, we should
also start by saying his tenure went
from 2020 to 2024.
And I feel like when you saythe year 2020, it's very triggering
for alot of people.
And that's because that wasthe pandemic.
It was a really difficult timefor a lot of people, but it also
served as a really high profile time
for sneakers in general because the
pandemic, one of the things that
itdid outside of obviously spreading
the coronavirus.
(03:58):
But the other thing that itdid was it made it feel as if resources
were scarce.
First of all, time with ourloved ones was scarce because we
weren't leaving the house, at least
most of the time.
Toilet paper was scarcebecause people were just going to
the stores and almost stealing it
at some point.
And sneakers became somethingthat people gravitated toward because
of the last dance documentary.
(04:18):
And because of that,obviously, prices went up.
But there were a lot of highprofile sneaker releases in that
four year period.
And you also have to remember,right before that period happened,
KobeBryant passed away.
So obviously there's a lot there.
Off white.
Off White was something thatwas huge prior to the pandemic.
And then, of course, VirgilAbloh suddenly passes away in 2021.
(04:40):
And so you see all of thesethings happening that make it a little
bit difficult for sneaker culture
because a lot of their quote unquote
cash cows have now left this earth.
And so they have to figure outa path forward.
And we saw even off white havea little bit of an imprint with the
50 dunk collection.
And we saw the dunk low pandahave its moment in the sun.
Now, it's something that youcan easily get, but at the height
ofthe pandemic, at the height of resale,
it was something people were going
tothe replica market for.
(05:07):
It was that popular.
Of course, you saw a lot ofclassics come back over the years.
The Air Max 90 bacon.
You saw a ton of Kobe's comeback.
The partnership between Kobeand Nike was reinvigorated.
Vanessa Bryant bringing it back.
And so for a lot of people,there was a lot of good shoes to
be had.
And over the years, though, upuntil very recently, resale prices
went from the highest they've ever
been to almost back down to what
they were pre pandemic.
(05:34):
For some shoes, it's not the truth.
Obviously, Kobe's are going tocontinue to sell because of his legacy.
He's no longer here.
So a lot of people want apiece of that legacy.
But there has been a lot to behad in that time period.
And I think people kind offorget that because the oversaturation
makesus forget that.
There has been a lot of heat,a lot of retros, a lot of really
quality releases.
(05:54):
Resurgence of new people likeAmma moneyer on the scene.
And I think that a lot of thathas caused sneaker culture to be
in a really good place today.
But if you also look at someof the business decisions, we're
talking direct to consumer strategy
now,this one, in some ways, I think that
it's good because I think you want
to have a direct line to your customer.
Obviously, if you're creatinga business, you want to be able to
be seen giving the product to your
customer.
(06:19):
And when you have middlemen,when you have businesses that are
in the middle, it can make it so
that costs are a little bit bloated
because you're obviously giving it
to another company who then you have
to figure out percentages and things
of that nature.
But also a lot of thosebrands, we're talking foot locker.
A lot of those brands had anostalgic pull to a lot of people
inthe culture.
I remember being a young kidand going into foot locker all the
time because it was the sneaker store
that was in the mall that I went
to.
(06:45):
That's where I saw my firstReebok pump.
That's where I saw a lot ofshoes that I really wanted that my
mom just wouldn't get me.
So I have memories there.
And a lot of people, that wastheir accessibility.
It was an access point to beable to get shoes, because going
online now, there are so many people
going after these shoes on release
daythat it's very difficult.
I did an episode aboutsneakers and how there's so many
people going after every single hype
release that people don't realize
thatit's all about numbers.
(07:11):
It's just too many peoplegoing out for shoe that they just
did not make enough supply of.
And really they can't makeenough of a supply of it.
So while going direct toconsumer obviously was meant to build
direct relationships with its consumer,
Ithink it did put a strain on traditional
retail partnerships that really,
again,in the sneaker market specifically,
had avery high level of nostalgia and
people wanted to go there.
(07:33):
So while they were trying to,again, make it more direct, I think
what they did was take away some
access points for people.
Also in this timeframe, Nikewas focused on sustainability initiatives
and we're talking about reducing
theircarbon footprint.
And that's when they startedto get into a lot of the things like
the Nike space hippie line, and they
started using recycled materials.
(07:53):
You started seeing therefurbished line, using the recycled
boxes, things like that.
I mean, there's something tobe said about that long term for
the company, but a lot of people
didn't see how it translated to sneakers.
And I think a lot of peoplefelt like refurbished shoes or sustainable
materials made it feel like sneakers
were less than what we normally would
get.
And honestly, as a culture,we're already pretty critical about
what kind of materials are used,
thekind of quality we get, the QC, stitching,
glue, stains, all that stuff.
(08:20):
So while the idea ofsustainability as a company is a
good thing, I think it fail to translate
to a quality product, at least in
the perception of sneaker culture.
And then, of course, Nike hasbeen known for technological innovations
throughout its entirety.
And while maybe they are alittle bit behind when it comes to
certain innovations in design, I
think when it comes to technological
advances, they are still kind of
in that space of being near the top.
(08:44):
And one of the things thatstands out to me is the Nike go fly
ease.
Now, the fly ease hasn'treally caught on as this mainstream
shoethat people are wearing, but I think
that the idea behind it of making
it alot easier, a hands free shoe designed
for accessibility, I think that is
a great, great thing.
And I do believe that we needto be thinking about people in the
culture and just people who are wearing
shoes in general, who maybe don't
have the, the privilege of having
twoarms or the privilege of being able
to tie their shoes.
(09:12):
And so I think that wassomething that happened in that time
period that was a really great thing.
Of course they were trying tohit on the NFT market which had this
moment but has kind of come down
to earth.
And so they started makingsneaker nFts and things like that.
All of that was really a fad.
But I think that kind ofsummarizes the highs.
And obviously I didn't hit allof them.
But Nike wasn't exactlydormant during this time period.
(09:34):
Unfortunately though, you arejudged a lot of times by what did
you do for me lately?
And that's where the lows come in.
So let's talk about some ofthese supply chain disruptions.
Covid-19 I talked aboutresources being scarce and that really
was a reality for so many people
andhonestly so many things.
And we're talking aboutfactory related shutdowns in Southeast
Asia due to the Covid-19 pandemic.
(09:55):
And we saw a shortage of somany materials, so many things that
really caused supply chain issues
towhere this direct to consumer idea
was even halted further because they
couldn't get shoes out.
And so while there was aperceived lack of resources across
theworld, in many places there was a
lack of resources and there was disruptions
in getting the products to their
consumer because even if you go direct
to consumer you still have to have
an avenue to get it to your consumer.
(10:22):
You still have to have anavenue to get the material source,
the materials.
And I think that was somethingthat happened during the pandemic
thatNike really had a hard time with.
They weren't the only ones,but obviously it made people feel
asif they weren't as high priority
forNike in terms of sneaker culture.
And then of course you getthis direct to consumer strategy,
whichis something that I said was both
apro and a con.
(10:43):
And they certainly wereaggressive in pushing this out.
And I honestly believe thatone of the things that happened is
obviously they took away access points,
they obviously took away nostalgia.
But I think that Nike'saggressiveness and trying to push
this so hard and pushing out so many
retailers that had been so critical
inmaking Nike the brand that they are
today.
(11:03):
I honestly believe that itcreated so much tension in the wholesale
market, it contributed to some product
availability and consistencies.
And I think people kind offelt like Nike was doing this and
they weren't doing it with us in
mind.
They really weren't doing itwith the consumer in mind, because
onits surface, when you cancel out
the foot lockers and the foot actions
and the east bays and so forth, what
you've done now is you've basically
madeit known that these companies don't
matter, these stores don't matter.
(11:29):
And so for a lot of people,that perception gets put on them
andthey think, well, I don't matter
because that's where I would go or
that's where I would shop for shoes.
And so I think it made Nikefeel or seem a little bit ruthless,
alittle bit lethal in their approach
because they're trying to push them
out as hard as possible.
And I think all of these camedown to you also had some labor practices
and criticisms about how they would
go about that.
(11:52):
And despite efforts to kind ofimprove some of them, they continued
toface criticism for working conditions
inoverseas factories.
And we're talking aboutfactories that were affected by the
pandemic.
Vietnam, Indonesia, I talkedabout supply chain issues.
And obviously all of thatcomes together for Nike to have a
hard time of it, even though resale
prices were going up, I think behind
the lines, behind the scenes at Nike,
they were having a tough time.
(12:17):
And all of this comes down tothe lowest of the lows.
This is the low that almostevery single person I've talked to
has actually pointed to directly
as towhy John Donahoe's time was a failure
and it was Nike stock performance.
I should note that during theheight of the pandemic, when the
stock market here in the United States
crashed all the way down almost to
rock bottom, I became a stockholder
of Nikebecause the stock dropped so much,
Iwas able to get in at a really good
entry point.
(12:43):
And over the course of thepandemic, while I was sitting here
internally complaining about resale
prices and about the lack of availability
for shoes, my Nike stock was going
uplike crazy.
And it had peaked at a pricethat was almost double what I paid
for it.
And now you're looking at itwhere it's barely over what I paid
for it.
And unfortunately for ussneakerheads and the sneaker community,
asmuch as we want to think that Nike,
Adidas, Puma, Asics, new balance,
thatthey're all out for us, out for the
culture, they're out for the bottom
line.
(13:14):
And when you're a publiclytraded company, your stock performance
isthe metric that everybody sees.
And so when you see that stockprice continue to go down, continue
togo down when they are trying to have
shoes more available, but they're
notselling out the stock price continues
togo down.
This is unfortunately a directreflection on your CEO.
And for John Donohoe, that wasthe last straw to see it go down
topandemic levels.
(13:36):
Think about that, folks.
When the stock market in theUnited States crashed so hard that
so many stocks were so available
and sodown, for Nike to go back to those
levels, that was a different time
inthis country.
That was such an unstable time.
And normally the stock marketcrashes that hard because of really
catastrophic events, events that
really can't be foreseen.
Think about 2008, when thestock market crashed and now you
have a CEO who is lording over a
company that has a stock price that
not only hasn't recovered, but has
doubled and gone right back down.
(14:08):
And you just can't have that.
The CEO gets paid a lot ofmoney and they get paid a lot of
money to make other people a lot
of money.
And so when your stock pricefalls by almost 50%, the board of
directors is just not going to sit
for that.
Because those people, that'stheir livelihood on the line.
And yes, they make a ton ofmoney regardless of what the stock
price is for nike.
(14:29):
So I'm not sitting here sayingthat you should feel bad for them
orthat I personally have sympathy for
them.
What I am saying though iswhen it comes down to it, your company
has to perform.
And if it's not performing,you, the CEO, are the one that is
going to get fired.
And so they have now moved onto Elliot Hill.
Now Elliot Hill has had anextensive tenure at Nike.
(14:50):
He has been at the companysince 1988, but he's held various
leadership roles at the company.
He played a crucial role inexpanding Nike's presence in North
America and in Europe.
And that's really big becauseNike obviously being the global brand
that they are, they needed touch
points to be able to do that.
From 2018 to 2020, he was thepresident of consumer and marketplace
andhe was responsible for overseeing
theirglobal marketing strategies, their
retail operations, their overall
consumer engagement.
(15:17):
And that's where I think thesneaker community feels like maybe
Nike is lacking these days in that
consumer engagement.
Because a lot of people wantto feel like Nike is listening to
their complaints and listening to
what they want and in some ways they
are.
In some ways they are not.
But what you saw during histenure in those positions is Nike's
revenue and market share grow, pushing
the company past $39 billion in annual
revenue by 2020.
(15:41):
So the company was doingreally well by the time that John
Donahoe became the CEO.
So it's not as if Nike washurting and all of a sudden John
Donohoe made it worse.
It's just these things ebb and flow.
He has been key to theleadership and global expansion,
like Imentioned, instrumental in driving
Nike's global expansion endeavors,
especially in emerging markets.
And they built localizedstrategies that deepen consumer loyalty
across regions.
(16:04):
And while I think that this istrue across the board, I think that
there are some people who feel that
Nike has not been loyal to them.
And so you're not seeing that.
But now he's going to take onthe CEO role and he's going to basically
come back in October of 2024.
It's his first time in the topleadership role and he's going to
be tasked with navigating the next
phase.
And that's why I ask you, whatdoes it mean for the future?
(16:26):
Well, the first thing that yousee is that Nike has decided to take
back and delay the Jordan one reimagined
black toe.
I think that's a sign ofthings to come because I think what
they saw was, hey, wait a minute,
wehave the black cement threes coming
out and now we're going to put this
piece of history.
I think they're going tospread things out of.
I was reading the other day onsole Savvy's website that they're
nowgoing to be stopping production or
pushing back production of a lot
of shoes.
(16:50):
They're going to be producing less.
They're going to make it seemas if there is less to be had.
They're trying to drive up hype.
And as much as we all hatethat, it's what is going to keep
sneakers alive.
Resell, at some point in hypeis going to have to buoy this market.
And I think that people aredisappointed with that because right
now is the best time for sneakers
because almost everything is available.
(17:12):
But that means that there's no hype.
That means that there'snothing to sustain it into the future.
And I think that Elliot Hillis going to look at this and he is
going to try to get Nike back on
the map.
They are perceived as beingnot cool right now and they just
cannot have that.
Nike needs to get back.
They need to grow their stock,they need to make more money, and
they're going to do that off the
backs of athletes and they're going
to do that off the backs of sneaker
culture.
(17:34):
Before we get to the end ofthe episode, though, as always, I
have a release of the week for you.
Release of the week where Ilike to give you a shoe that catches
my eye.
(17:56):
It's not always hype.
Sometimes it is.
It's just something that Iwant you to know about.
This is a shoe that I haveseen a lot of people talking about
onsocial media, specifically Instagram,
butit is on September 30, 2024, the
Nike Air Max 95 erosion.
The Air Max 95, as I said, isone of those if you know, you know,
kind of silhouettes.
If you grew up with it, if yougrew up wearing it, you know how
fire it is.
(18:19):
Maybe if you haven't seen itbefore, maybe if you're not familiar
with it.
It doesn't seem like it'ssomething that fits in today's aesthetic,
today's society.
But this rosen shoe with twodifferent shoes, with the colors
thatit has, that muted, earthy palette,
Ithink it's actually beautiful.
It's really awesome.
I won't be going out for itbecause I've copped enough this year.
I see a lot of hype for it.
(18:39):
I see a lot of people talkingabout it.
The thing is, though, this isnot going to be like a hyped release
inthe same way that you'd see a Travis
Scott.
This is just a very beautifulshoe, at least from the pictures.
It's part of the city pack andI think it's just a great, great
addition to the Air Max 95 lineup.
We've seen some awesome oneswith that Toronto release a couple
ofweeks ago.
So we got two fire air Max 95sright in a row.
(19:01):
And I believe that that isyour time to cop one.
If you do not have one, and itis a beautiful one, it's perfect
for fall.
It's perfect for.
Honestly, it's perfect for any time.
So if you need an Air Max 95in your collection, that is the time.
Do you, as sneaker culturecare about CEO's and do you think
that this changeover is going to
make things better for the culture
ordo you think it just doesn't matter?
I would love to know.
(19:22):
Call the fire footwear hotline.
Give me a sneaker story.
Give me your opinion.
I'd love to play it on afuture episode.
And that is for your us callers.
Area code 202-643-9170 ifyou're international, just make sure
you get that plus one country code
in there.
I love to hear from all thepeople who are part of sneaker culture.
You can find me on Instagram.
(19:42):
The handle is I rfootwearpod.
If you want to see reels, youwant to see videos, you can find
meon TikTok you can find me on YouTube.
Fire footwear sneakers talkwith Matt freights what you would
search if you go to YouTube.
I'm just shy of 1400 subscribers.
Please hit like please hit subscribe.
It would mean the world to mebecause I'm trying to do some different
things out there.
Hope this finds everybodywell, fam, I hope this finds everybody
safe.
(20:04):
And as always, I will talk toyou next time.
This is fire footwear.
(20:26):
The opinions and viewpointsexpressed on fire footwear are those
of Matt freights and his guest, and
not necessarily those of the Matti
Ice media network.
Fire footwear is exclusivelyowned by Matt Freights and is brought
to you by the Matti Ice Media Network.
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