Founder stepping down after starting Nike at age 26
Nike is losing its top shoe salesman.
Phil Knight announced he'll step down next year as Nike chairman, bringing to a close a half-century saga that began when he founded the company in 1964 at 26.
When Knight started Nike - back then it was called Blue Ribbon Sports - sneakers were mostly shoddily made shoes for kids. A peerless marketer, Knight, now 77, turned a humble product made in low-cost factories (sometimes controversially) into a status symbol for all kinds of people of all ages, from the inner city to the country-club tennis court.
Along the way, Knight built a global behemoth with more than 56,000 employees and $30 billion in sales. Nike surpassed Adidas as the world's biggest sporting-goods maker and became a Wall Street favorite, with the shares rising 14,000 percent since the company went public on Dec. 1, 1980.
Current Chief Executive Officer Mark Parker, who Knight has endorsed to replace him as chairman, will have to build on that legacy at a time when competitors are regrouping. Adidas is accelerating its product development, aiming to halt a slide in market share. And New Balance just introduced its biggest ad campaign ever, promoting its push into several new sports. Under Armour also is making gains.
A former accountant who worked at both Price Waterhouse and Coopers - before they merged - Knight played a hands-on role for most of Nike's rise and served as CEO until 2004. Known for wearing sunglasses and Nike sneakers in almost any setting, Knight was a salesman first and foremost. He married the Nike brand with professional sports and pop culture long before doing so seemed obvious. With the advertising agency Wieden & Kennedy, Nike became known for iconic ad campaigns in the 1980s and 1990s.
The "Just Do It" slogan became part of the American vernacular. Then there was the pairing of Michael Jordan with Mars Blackmon, a character played by Spike Lee, in a series of popular ads. John McEnroe in a spot to the Beatles' "Revolution." Bo Jackson in the "Bo Knows" campaign. The brand took on social issues with the "If You Let Me Play" ads that showed why girls should play sports.
"I often describe them as a marketing company that makes shoes," Matt Powell, an analyst for research firm NPD Group, said in 2013. "They're in a class by themselves."
Knight's tenure wasn't perfect. He and Nike came under fire in 1990s for outsourcing manufacturing overseas and using sweatshops. To the company's credit, it cleaned up its act and is today cited as an industry exemplar.
After more than 30 years running Nike, Knight began looking for a successor early last decade. He eventually chose William Perez, who left the CEO job at S.C. Johnson & Son - a maker of household cleaners. It didn't last long. The two men clashed, and Perez was out after about a year. That paved the way for Parker, a Nike lifer, to be promoted from the marketing and design side of the company to CEO in January 2006.
Parker has led Nike to new heights by turning the company's innovation and marketing toward soccer. The company was once an afterthought in the world's most popular sport and now it's on par with the formerly dominant Adidas. Knight rewarded Parker for his performance by recommending that he take his place as chairman.
In its most recent quarter, the company trounced analysts' estimates for profit, sales and orders last quarter, sending the stock into record territory.
"It's extremely impressive for a company this size to put up these numbers," Brian Yarbrough, an analyst at Edward Jones, said last week. "I don't know what stops this train right now."