Nike scandal threatens its image with women shoppers at tumultuous time
It’s never a good time for companies to grapple with a scandal over sexist behavior. At Nike Inc., it’s especially awkward given its ambition to target female shoppers.
The world’s largest sports brand expects much of its future growth to come from selling more sneakers and gear to young women. And fresh concerns about a lockerroom mentality could hurt Nike’s reputation with a demographic group that it desperately needs.
That risk looms over a company that saw two high-profile executives step down last week amid a broader review of misconduct. The men reportedly stood by while subordinates were demeaning to women and people from other countries—behaviour that brought a painful moment of soul searching to a business that has long touted its progressive spirit.
Chief Executive Officer Mark Parker is poised to make his first public remarks since the controversy surfaced when he delivers earnings on Thursday.
“It’s an enormous reputational risk,” said Davia Temin, founder of the crisis-management company Temin & Co. “We know millennials want to work for places that have a higher purpose. They are going to put their buying power in the same place.”
The company is especially ripe for being deemed phony and inauthentic, she said. Unlike some other businesses caught up in the #MeToo movement—a push to improve treatment of women, especially in the workplace— Nike has marketed itself as a champion of female empowerment, Temin said. Anything that undercuts that image could be a brand killer, she said. The fresh scrutiny comes at a time when Nike is trying to bounce back from a sales slump in North America. The firm has suffered two straight declines in the key market.
“When we became aware of behavioural issues in some parts of the company, we took action swiftly,” spokesman Greg Rossiter said. “We’re taking it seriously, and taking steps to address it.”
Nike pointed to recent internal research done with a third party that showed for every dollar a male employee makes in compensation, a woman in a similar role makes 99.6 cents. And it’s about the same ratio for minority employees versus white workers.
The company also said that its global workforce is 48% female. Women account for 41% percent of management positions. And a third of Parker’s direct reports are women.
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