C-Suite Hiring Trends – Footwear News

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Call it the great athletic leadership shakeup.

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 Armour and Reebok all have new top leaders on board. (VF Corp. is also in the midst of a CEO search.) 

“I don’t recall another time when there was this much change and this many moves happening at once,” said Matt Powell, the longtime shoe industry analyst who recently launched consulting firm Spurwink River. “Retail is really hard, and it’s not getting any easier. Boards are feeling pressure to be responsible to their shareholders. It’s putting phenomenal pressure on CEOs.”

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

The sneaker boom is waning as fashion-forward consumers look for fresher alternatives. And the lack
of innovation in the market is prompting some cash-strapped consumers to hold back on new purchases completely. 

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“Retail floors have never looked more tired,” Powell said in a recent post on LinkedIn. “There is little to surprise or delight today at sneaker retail.” 

What’s more, the aggressive shift to DTC hasn’t played out favorably, with some brands failing to recoup sales that previously came from the wholesale business.

How will the new CEOs navigate myriad challenges? That remains to be seen — but most insiders agree that change is good. 

Women From Outside the Industry Are Shaking Up the C-Suite  

When Nike tapped former eBay exec John Donahoe as CEO in 2019, the company sent a clear message: It was time for an outsider to take charge as the company forged ahead with its digital-first future. 

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

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While Donahoe’s resume didn’t look like most traditional footwear CEOs who had spent decades climbing the ranks, he fit the mold of a male chief of an athletic company. But just below the CEO level, Nike has been focused on promoting women to key executive roles, including Heidi O’Neill, the president of consumer and marketplace. And female leaders steer 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 Armour have looked outside the industry for their new women CEOs, heralding a new era. The moves mirror a larger shift across corporate America. Five new women CEOs of Fortune 500 companies began their roles as of Jan. 1, which tipped the percentage balance to over 10% of the total.

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

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“It’s an opportunity for us to have someone who is thinking about this business in a clean way,” said Kevin Plank, founder, executive chair and brand chief at Under Armour. “We have industry experts at [the company] — people who understand lots of pieces — but it’s time for us to amplify the play. You’re going to see a different Under Armour.”

Linnartz’s track record in running a global business — Marriott has nearly 8,200 properties and 30 brands around the world —  and building the Marriott Bonvoy customer-loyalty program was highly attractive for Plank.

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

Mary Dillon Dona Young

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

CREDIT: Courtesy of Foot Locker

Foot Locker is also making major moves under Mary Dillon, who took over for Richard Johnson as CEO in September amid a changing of the guard at the athletic retailer. (Dona Young replaced Johnson as chair 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 have now departed, indicating “how badly a new perspective was needed.”

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

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

At Foot Locker — which has been navigating disruption in the wake of Nike’s decision to sell less to the retailer — Dillon’s first order of business has been to streamline operations and cut costs. 

In January, the retailer said in an SEC filing it would eliminate an undisclosed number of “corporate and support roles,” which the company expects to account for about $18 million in cost savings on an annualized basis starting in fiscal 2023. Foot Locker is also winding down its Sidestep banner in Europe, which accounts for 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 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 in the past year, the vast majority of new athletic 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 is 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% of that group were women. And 57% of them came from outside the industry.

“The emerging profile of the new footwear chief marketing officer reflects a willingness to look for diversity of thought and diversity of background,” Rudy said.

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

“If you look to the outside, 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 challenges mounting for the athletic business, market watchers believe that now is the time for reinvention — and the new class of leaders will be a crucial part of the equation.

“The business model we are running, at least on the athletic side, is really identical to the one [Nike co-founder] Phil Knight started 50 years ago. We’re still buying way out on futures. The margin structure hasn’t changed,” Powell observed. “This is the time for companies to ask themselves what they want to be and not do things as usual. I hope people take risks. 

Nikic agreed that the fresh thinking is crucial, and he also alluded to the punishing manufacturing lead times on the brand side. 

That’s why it might take more time to see changes on the brand side.

Bjorn Gulden, FNAAs

Adidas CEO Bjørn Gulden, who formerly led Puma, at the 2019 FNAAs.

CREDIT: Andrew H. Walker/Shutterstoc

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

For Adidas, it might 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 with Kanye West. 

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

Powell believes that turmoil 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 vastly different in two years compared to two years ago.”

Will C-suites look vastly different too?

– With contributions from Peter Verry

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