Lululemon CEO resigns, the stock stays steady. The brand continues to introduce new apparel and make headway into the men’s apparel market which is a growth area for Lululemon.
I bring this up as a reference to how the stock of a company very often is tied to internal issues; but when a company has in place a plan and that plan is actually in motion with results that back up the growth, the turnover of figureheads within a company has very little effect on the company itself. Does it invite some disruption? Of course it does and it’s only natural to wonder where a company is heading when the heads of departments are stepping down.
The difference here with Lululemon and Nike is that less than a year ago Nike was trimming their department and corporate heads. Their shares dropped in price accordingly because Nike was definitely showing rust. Last year it was an adjustment to adidas’ growth and the finalization of their shift to CDO and digital e-commerce projects. This year as the brand begins to streamline divisions and settle into their new CDO initiatives which require less oversight, the resignations from the host of divisions where people have been removed, and workplace issues, actually allows Nike to further trim top heavy areas in their chain of command. Any analyst paying attention needs to realize that Nike is an efficient machine that handles adversity very well. When Trevor Edwards was dismissed it was seen as a brand taking care of an issue and getting ahead of the problem.
Olivia Pope time… if I’m consulting Nike I tell them to continue to research the issues within the company and make public that they are removing the issues at the top of the chain. This not only builds a narrative that Nike is for diversity, it also shows that unlike other companies who hide their issues Nike is transparent about correcting the problems that exists within its walls. Nike is in a win-win situation. The focus is no longer on the talk of “Nike’s Locker Room Atmosphere,” the talk has now shifted to Nike’s issues with HR and diversity which allows the brand to reach a larger segment with hires that will show that they are “taking action”.
Here is the thing that is important here:
Nike Epic React has had a successful launch.
Nike Air Max 270 has been rolled out and is making a lot of noise in the market.
Nike CDO and Nike Plus Memberships are on the rise and the brand is delivering product that is once again selling out. As much growth as adidas had in the last year and a half Nike still had solid numbers when you dig into their quarterly reports.
Nike Zoom X is about to be rolled out with a new Nike 3D printed upper and Nike also launched the Zoom Vapor Fly in limited numbers.
The NBA contract is serving the brand very well with some of the most exciting storylines and games of any recent playoffs and the WNBA uniform launch went much better than any information about the WNBA in the last few years.
APLA and Greater China are seeing considerable growth.
Nike has acquired two tech companies that will solidify their CDO initiatives:
NIKE, Inc. Acquires Invertex As A Solution for the Home Becoming the Dressing Room
If an analyst is writing down Nike then those who are in a position to buy based on that write down will definitely buy as the issues with diversity will not affect the steps Nike as a brand has taken and continues to take by diminishing their top heavy corporate structure with these removals. Nike’s stock is just fine and now they will look like a brand that is actively taking a position on issues in the workplace as other companies who aren’t in the spotlight for problems are quietly solving their problems… if they are actually solving their problems at all.
