Nike's half measures need another shoe to drop

THE FIRST SHOE has dropped at Nike. On Thursday, new chief executive officer Elliott Hill set out his vision for turning around the world's biggest sportswear company, which has lost out to rivals after it prioritised selling through its own stores and website, and didn't deliver enough new products, relying instead on classic styles.

- Bloomberg

Hill warned that his efforts would be painful in the short term, with sales and margins in the current fiscal quarter expected to fall more sharply than in the previous three months. But he stopped short of getting all the bad news out of the way early, for example by writing off those out-of-fashion sneakers and lowering sales and earnings expectations for the coming years. That looks like a missed opportunity, and it means the continued threat of a reset as Nike embarks on the difficult task of winning once more. It's been obvious for some time what Nike should do. And Hill set out a plan to just do it.

The company will be obsessed with sport once more. Hill will organise Nike into "fields of play" around basketball, football, and soccer, with common divisions between men's and women's products within these. The hope is to unleash a wave of innovative new products.

He is right to focus on newness. Nike needs to release novel sports products that can drive broader trends. After all, while performance is the cornerstone of Nike, it and rival Adidas also resemble fashion brands, and need a pipeline of fresh items.