Nike’s turnaround has proved harder than expected. The sportswear giant has fallen far enough to lose its place among America’s 100 biggest blue-chip companies last week, having lost $200 billion in market cap since its 2021 peak.
It’s now bringing a scion of the world’s biggest luxury conglomerate into the boardroom to help it regain its edge.
Alexandre Arnault, the 34-year-old son of LVMH CEO Bernard Arnault, announced Wednesday he’s joining Nike’s board of directors, writing he’s “been a fan of Nike” for its sports, performance, creativity and innovation. He currently helps run LVMH’s wines and spirits segment.
“As a lifelong sports enthusiast and runner, these values resonate deeply with me,” he wrote on LinkedIn. “Nike has been part of countless kilometres, races and personal goals over the years, which makes the opportunity to contribute to its next chapter especially meaningful.”
Nike executives pointed to Arnault’s experience helping heritage companies like German luggage-maker Rimowa and Tiffany feel current as the reason behind his role. As Rimowa’s CEO, Arnault reworked its stores and leaned into buzzy collaborations with Supreme and Off-White. He later moved to overseeing products and communication at Tiffany, where he helped bring the 19th-century jeweler deeper into pop culture through a streetwear collaboration with Nike and marketing campaigns like “About Love”, which featured Beyonce, Jay Z and a Basquiat painting.
“Alexandre understands how some of the world’s most influential brands stay relevant, deepen consumer connections and drive long-term growth,” Nike CEO Elliott Hill said. “His experience across innovation, digital transformation and brand building will be an asset.”
Nike is still trying to turn itself around
Nike has spent nearly two years trying to undo the mistakes that helped push it into a slump. It brought 32-year Nike veteran Elliott Hill out of retirement to rebuild relationships with wholesalers and pour resources back into innovating for athletes.
Its latest numbers show the work that remains. Nike’s fourth quarter revenue fell 1% to $11 billion, while Nike Direct—the part of the business Nike’s previous CEO said was the company’s future—fell 7%. Digital sales dropped 12%, and sales at Nike-owned stores fell 7%. Despite seeing some North American growth, sales in China declined for eight straight quarters as its homegrown rivals Anta and Li-Ning are taking over.
The harder problem may be getting consumers excited about Nike again. For decades, the company could turn products made for elite athletes into things millions of people wanted to buy and wear. Its footwear competitors Hoka, On, and New Balance have grabbed attention for running and lifestyle shoes, while Nike has struggled to produce another breakout product with cultural pull. Bringing on Arnault might help.
“Given Nike’s problems, it needs all the help it can get at this point,” David Swartz, a senior equity analyst for Morningstar, told Fortune. “My presumption is that Nike will only make a move like this if it has some tangible benefit. It’s not like Nike needed more board members.”
LVMH is trying to restore its own momentum
Arnault is joining Nike while his family’s luxury empire is working through a slowdown of its own.
LVMH’s latest financial disclosures were mixed. Fashion & Leather Goods, its largest segment and home to Louis Vuitton and Dior, reported a 1% organic revenue decline year-over-year and a 7% drop in year-over-year profit. Analysts like JPMorgan’s Chiara Battistini have flagged the question of whether leather goods are just showing signs of fatigue after years of booming demand and aggressive price increases.
Alexandre’s corner of the business fared better. Wines & Spirits, the smallest of LVMH’s five core segments and the one he helps run, grew 5% organically in the first half, a result Battistini called “a nice surprise” compared with the bank’s forecast.
Questions still linger over who will eventually succeed his 77-year-old father at the helm of LVMH. Alexandre is one of five Arnault children who are managing different parts of the empire and is one of the four sitting on LVMH’s board. Bernard Arnault has rejected the report from Le Monde that his children are fighting over succession. The family holds 50.2% of LVMH’s shares and 66.4% of its voting rights.
“From Arnault’s perspective, getting experience on Nike’s board could help with his future at LVMH,” Swartz said.