More on Nike: the channel issue

According to this article in The New York Times, the major issue in the departure of Nike's short-term CEO, William Perez, was a culture clash with Nike old-timers ("Nike executives ... say that it takes 20 years to become an insider at the famously insular sneaker company.") But of interest to us is that part of that culture clash may have had to do with channel issues.

One area of disagreement was Mr. Perez's effort to strengthen ties with Nike's biggest retail clients. Mr. Knight rarely spoke with executives at national chains such as Finish Line. In one of his first gestures as chief executive, Mr. Perez visited the headquarters of several chains, charming the stores but upsetting Nike's sales staff.

It also seems that some of Perez's efforts in regard to the channel may have been seen as counter to the Nike brand strategy -- a trade-off that will resonate with many marketers in many companies:

Mr. Perez, for example, believed that the Nike brand had largely saturated the high-end market - Nike controls 90 percent of the market for sneakers priced over $100 - and should grow by introducing more exclusive lines to lower-end retailers.

So he lowered the minimum purchase requirement for chains like Famous Footwear ans Shoe Carnival to 10,000 from 25,000. But some Nike executives believed the move "cheapened the brand," said John Shanley, an analyst at Susquehanna Financial Group who tracks the company closely.