The departure of two top executives at Nike speaks to a larger cultural issue, said Liz Dunn, founder and chief executive officer of Pro4ma, a forecasting and analytics firm for retailers.
“We’re seeing it all over corporate America,” Dunn told CNBC on Friday, referring to issues of workplace misconduct in the era of the Me Too and Times Up movements. “In some instances it seems it’s almost part of the culture.”
On Friday, The Wall Street Journal reported that Jayme Martin, vice president and general manager of global categories for Nike, was removed from his post. Martin has been with the company since 1997. The news came only a day after Nike President Trevor Edwards announced he was resigning and would retire in August.
While Nike has been hush-hush about the details surrounding the two top executives’ departures, in a statement the company said it is looking into workplace behavioral issues but that it was not implicating any one person or department. The company did not confirm or deny whether Edwards and Martin were removed from their posts because of misconduct. The internal employee memo went on to say that inappropriate workplace behavior does not reflect Nike’s values.
Dunn, who is also an operating partner at Consumer Growth Partners, called the news “troubling.”
The Journal reported that the two men apparently protected employees that exhibited demeaning behavior toward female and foreign colleagues.
“This speaks to the culture at Nike, that two individuals looked the other way,” said Dunn, who said she does not have any insider information on the company. “It says something if [the company is] elevating people who kind of look the other way if there’s misconduct going on,” Dunn said on “Power Lunch.”
“Culture and people are enormously important,” she said of any organization.
In a note, Sam Poser, equity research analyst at Susquehanna International Group, wrote that the news of Edwards’ and Martin’s sudden departures was “concerning” and that the “swift reshuffling at a critical time in Nike’s history is cause for concern.”
“Clearly, they acted quickly,” Poser said on “Power Lunch.”
Dunn agreed that it appears Nike is addressing the issues internally. But she pointed out that it’s a bigger fix than simply replacing two individuals.
“There are cultural changes that need to occur,” she said.
But Dunn said she does not think the market or investors are generally swayed by internal workings at any one company.
“Just as long as the financial performance of the company continues to do well,” she said.
While share prices of Nike immediately fell after the news of Martin broke, after-hours trading of the stock on Friday was up 0.2 percent.
“The problem is, when these companies come out, and they’re kind of vague and say there was a ‘conduct issue,’ … investors … start wondering,” Stacey Widlitz, president of SW Retail Advisors, said Friday on “Closing Bell.”
To handle the abrupt changes, Nike Chairman and Chief Executive Officer Mark Parker said he plans to stay on longer with the company, through 2020. This could help quench investor fears of instability and transition issues, Widlitz said.
