Nike co-founder Phil Knight, who at 24 sold shoes out of his car before eventually helping build the most lucrative footwear and apparel company in the world, announced Thursday that he would be stepping down as chief executive and president of the company.
Knight, who has been the company's only chief executive, notified the company's board of directors at its quarterly meeting in Beaverton, Ore., that he would resign his positions on Dec. 28. The 66-year-old will retain the title of chairman, but his role as CEO and president will be taken over by William Perez, who most recently served as chief executive of SC Johnson, a company most known for its Ziploc and Windex brands.
"Nike has enjoyed tremendous success as we have grown to become a $12 billion company," Knight said in a statement. "I am confident that as CEO of Nike, Inc., Bill will lead Nike's extraordinary team of people to create an even bigger and better global company."
In 1962, Knight founded Blue Ribbon Sports Inc. with his former University of Oregon track coach Bill Bowerman. Before Nike and the air bubble technology, Bowerman was inspired by a waffle iron to put the criss-cross design on the bottom of track shoes to add traction. Sales in the first year totaled $8,000.
In 1971, Knight paid designer Carolyn Davidson $35 to make the famous swoosh. The following year, the company changed its moniker to Nike, named for the Greek goddess of victory.
Knight played an integral part in building the company into what it is today. Risks taken by the company, ultimately approved by Knight, in the area of sports endorsements have paid off. Nike, which employs about 23,000 people, has approximately $1.7 billion tied up in sports endorsement contracts.
In 1984, Nike was the only brand willing to give a rookie named Michael Jordan his signature shoe. In February, the 20th version of the Air Jordan sneaker will debut, and Jordan has his own brand -- with revenues surpassing $500 million -- housed under the Nike umbrella.
"To me, Phil Knight will always be recognized as a sports marketing visionary -- he will always be a part of Nike," Jordan said in a statement. "I learned so much about the industry from him and will always admire his drive and creativity."
In 1996, despite Jordan's success with the company, Knight was criticized by many sports marketers for signing golf phenom Tiger Woods to an exorbitant, five-year, $40 million contract. Soon after the ink had dried, Knight -- when asked by a Sports Illustrated reporter whether Woods had the same charisma and flair as Jordan -- responded confidently.
"You bet your ass," Knight said. "Same deal."
Five years later, Nike reportedly paid the golfer $100 million for the next five years, the same price Nike paid to sign LeBron James for seven years, beginning last season.
After the Cavaliers' victory over the Charlotte Bobcats on Thursday night, James called the news of Knight's stepping down "shocking."
"He gave me a great opportunity to do things off the court, try to represent Nike the best I can on the court," James told Akron Beacon-Journal reporter Brian Windhorst.
Six-time Tour De France champion Lance Armstrong, a Nike endorser, said he was surprised by the news.
"Nike is a remarkable story and he's behind a lot of it," Armstrong told ESPN.com. "A few years ago, people were saying, 'Nike is done, it's not the same,' but Phil dug in and gave the necessary guidance and inspiration and they're dominating the world again."
Earlier this year, Nike donated $1 million and paid for the first five million of Armstrong's LIVESTRONG wristbands, which raised money for Armstrong's foundation that helps young people fight cancer. Thanks to Nike's influence, the rubber circles became a hot fashion item. More than 15 million have been purchased.
"They gave them to athletes, but this proved that Nike is not just a sports company," Armstrong said. "They put them in the hands of people who have influence in the MTV world and in Hollywood."
Throughout the '90s, Knight was the No. 1 target of activist groups who decried Nike's labor practices in Asia. Criticism has been muted in recent years as the company devoted greater effort toward overseeing the work force that makes its products.
Knight has a net worth of $7.4 billion and was ranked 22nd in Forbes' most recent list of "The 400 Most Wealthy Americans." He has donated at least $100 million to causes, the bulk of which has gone to his alma mater.
Despite his riches, Knight is not known to flaunt it. His work attire usually consists of a T-shirt, a blazer, jeans and shoes -- Nikes, of course.
He also has been known to deflect credit for the company's current position in the marketplace -- Nike shares closed at $85 Thursday, $2.40 off the company's all-time high.
"Our culture has everything to do with our success, but it is by no means only my doing," Knight told The Sports Business Daily a year ago. "Nike is young and irreverent, and I am neither."
Nike has been aggressive in swallowing up other companies. Acquisitions in the past decade include Bauer Hockey (1995), Hurley International (2002), Converse (2003) and Starter (2004).
"They have a very strong management team and they are well-situated, but I'd be shocked if Phil completely stepped away," said Fred Schreyer, who was Nike's director of sports marketing from 1987-1993.
Knight's oldest son, Matthew, died in May in a scuba diving accident in El Salvador. Although some had speculated that this was the catalyst for Knight's departure, the statement issued by Nike indicated that Knight had requested more than a year ago that the board of directors initiate a search for his replacement.
Darren Rovell, who covers sports business for ESPN.com, can be reached at firstname.lastname@example.org.