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Document 42 of 67.

Copyright 1998 Information Access Company,
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Copyright 1998 Fairchild Publications Inc.
Footwear News

June 29, 1998

SECTION: No. 26, Vol. 54; Pg. 2; ISSN: 0162-914X

IAC-ACC-NO: 20875188

LENGTH: 643 words

HEADLINE: NIKE REALIGNS, GIVING MOST SPORTS THEIR OWN TEAM.

BYLINE: Solnik, Claude

BODY:
ACG, HOCKEY, JORDAN NOW STAND-ALONE OPERATIONS, PLAYING OFF GOLF, SOCCER MODELS

NEW YORK -- Signaling increased efforts to coordinate its footwear, apparel and equipment, Nike Inc. is reorganizing, grouping employees by sub-brand and in some cases sport rather than by job description.

In its most recent move, the Beaverton, Ore.,-based company last week made its Nike ACG outdoor division a stand-alone operation and named a president to head that group. ACG joined Nike Hockey and the Jordan brand as their own units broken out of the overall company bureaucracy.

Throughout the company, Nike has begun to reorganize staffers -- who previously had been divided into departments like footwear design, apparel design and marketing -- into groups focused on ACG, hockey, Jordan, soccer and golf. Other sports, including running and basketball, remain part of the larger Nike organization.

"This essentially means they're [staff for certain subbrands and sports] all in the same place and can collaborate more," said Kathryn Reith, a Nike spokeswoman. "We moved in that direction [with other sports]. But they're not formal units with their own presidents."

When Nike said Nike ACG would be a stand-alone business unit, it named Gordon McFadden, previously of Helly-Hansen, president of Nike ACG. Pierre Boivin, president of Nike-owned Bauer Inc., became president of Nike Hockey.

The presidents of Nike's stand-alone business units report directly to Tom Clarke, Nike president and chief operating officer. And the businesses, Nike hopes, breaking out of the overall Nike bureaucracy, establish clearer identities within the company.

The shift toward a company divided by sport and subbrand, Reith said, started over a year ago with soccer when Nike moved apparel, footwear and equipment staff for that sport together. But Nike at least so far hasn't created a stand-alone business unit with soccer, which doesn't have its own president.

"It [combining footwear, apparel and other staff in soccer] has worked very well in terms of getting people in that unit who understand and live that game," said Reith.

In golf, which also is not a stand-alone entity, footwear, apparel and equipment staff also have been moved together. And the company says that combining people by sport, not function, creates more fused, focused, efficient teams worldwide.

"By unifying these teams, these teams wil be able to have a strong point of view," said Valerie Taylor-Smith, U.S. creative director of image design for Nike. "Footwear and apparel will be working together to create together. And equipment as well."

Marcia Aaron, analyst with BT Alex. Brown, said she believed Nike has been a leader in establishing sub-brands with its overall operations, and said that could help consumers sort through the almost $ 10 billion worth of Nike product that hits store shelves around the world every year.

"On something like that, it [a new logo] helps differentiate the product. For those consumers that may be a bit overwhelmed by the availability of the swoosh, it gives them something different," she said. "They definitely let the consumer know it's not just Nike."

Nike acknowledges, as the company has grown, there has been some backlash against the omnipresence of the swoosh. And that may hold it back in efforts to sell more product to some enthusiasts who seek specialists in particular sports.

"The feeling about Nike is we're this big umbrella brand that doesn't specialize," said Taylor-Smith. "We're competing in these markets."

The moves are also part of an effort to streamline bureaucracy.

Whether Nike will formally separate other sports, and team sports, into their own businesses-within-the-business remains to be seen.

"We may have more announcements later on," said Reith. "But I can't speculate on those."

LANGUAGE: ENGLISH

IAC-CREATE-DATE: July 8, 1998

LOAD-DATE: July 09, 1998