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Nike plans to replace the head of its China division to foster innovation and respond to new market demands amid recent operational challenges. Angela Dong will step down as chairwoman of Nike China after two decades with the company, effective March 31. Meanwhile, Cathy Sparks, who has accumulated 25 years of experience and previously served as vice president and general manager for the Asia Pacific and Latin America regions, has been appointed as VP and GM for China.
This leadership transition appears to be driven by the company’s performance pressures, particularly in China. Revenues in China declined by 17% to $1.4 billion in the three months ending November 30, compared to the previous year, with pre-tax earnings dropping 49%, according to the financial report for the fiscal second quarter released last month.
Additionally, Nike’s net profit fell 32% to $792 million, and operating income decreased slightly by 1% to $12.4 billion. Gross profit margin also shrank by 300 basis points to 41%, mainly due to increased production costs driven by new tariffs in the US and intensified promotional activities aimed at clearing excess inventory, especially in North America.
While former executives may have had a better understanding of the Chinese market, they might have struggled to adapt and meet evolving consumer demands. An analyst observed that appointing a leader without local management experience is a strategic move aimed at breaking existing interest structures and fostering opportunities for innovation and reform.
The analyst also highlighted that Nike’s product offerings, marketing strategies, and distribution channels in China are somewhat outdated and lag behind the swift shifts in the Chinese sports consumption market. A local sports equipment dealer pointed out that although Nike possesses advanced technologies and attractive products, integrating them into emerging markets and adapting to local marketing preferences require strong operational capabilities from local teams.
Though the leadership change came as a surprise to many, a source close to the company revealed that following Simon Men’s departure as vice president of sales at the end of last year, rumors began circulating about senior management reshuffles not only in China but also at the U.S. headquarters and other regions.
Dong joined Nike China as CFO in 2005. After serving in various roles, she was appointed chairwoman, CEO of Nike China, and CEO of the ACG brand in October 2024. Her appointment marked the first time a senior executive from China has led a global brand within the company.
Industry insiders saw Dong’s appointment as a sign of Nike’s strong emphasis on China and its commitment to revitalizing the ACG brand. The move also reflected a strategic shift towards decentralizing decision-making and boosting investment in China to respond to changing global economic conditions and fierce market competition.
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