Nike Just Got Booted From The S&P 100 And Of Course McKinsey Is Somewhere In The Crime Scene
I have written about McKinsey & Company a bunch of times over the years because they might be my favorite business phenomenon on earth.
And not because I admire them. Because I genuinely do not understand how this racket continues to work.
McKinsey is basically the 1985 Chicago Bears of convincing gigantic corporations to hand them millions of dollars so a bunch of 27-year-olds with MBAs can fly business class into town, interview the people who actually know how the company works, put what those people told them into a 145-page PowerPoint presentation, rename everything with words like "optimization," "consumer journey," and "strategic acceleration," then leave before the building burns down.
And somehow, no matter how many buildings burn down, somebody else hires them.
I've written about Warner Bros. Discovery somehow taking HBO, arguably the greatest name in the history of premium television, and deciding it needed to be called fucking "Max." You know, because when you've spent 50 years creating one of the strongest brands in American entertainment, the obvious move is to erase the strongest part of the name.
I've written about the consultant-brain destruction of Boeing at length...
And now we arrive at Nike.
Fucking NIKE. Lol.
The company that gave us Michael Jordan, Bo Jackson, Andre Agassi, Tiger Woods, Serena Williams, Charles Barkley. "Just Do It." Air Max. Air Force 1. The Jordan Brand. Spike Lee commercials. The Swoosh. Arguably the greatest marketing company in the history of the world.
A company whose brand was so deeply embedded in American culture that for anybody born in the '80s or '90s, Nike didn't even feel like a corporation. It was practically part of childhood.
And somehow these geniuses managed to turn THAT into a corporate turnaround story.
So last week Nike got booted from the S&P 100, (for the finance illiterate like myself- that is the index of 100 giant American blue-chip companies. The creme de la creme and namesake big dogs that are synonymous with big business, and the USA), after being a member for roughly 18 years. Important clarification because I’ve seen people screwing this up online- Nike is NOT being removed from the S&P 500. The S&P 100 is a subset of the S&P 500 made up of some of America’s biggest, most established companies. Nike remains in the larger S&P 500. (S&P Global)
But don’t let that distinction ruin how fucking insane this whole thing is.
Nike’s stock peaked around $179 in November 2021. This week it was trading around $38. No joke.
That is roughly a 76 percent collapse.
About $230 BILLION in market value has disappeared. Billion. With a capital B.
Nike didn’t invent some weird app that briefly became popular during COVID, and they didn’t manufacture fax machines. They didn’t get technologically wiped off the face of the earth like Blockbuster. They sell fucking sneakers, and to be honest Nike is THE sneaker company.
The amazing part is that this whole disaster wasn’t some unforeseeable asteroid hitting Beaverton, Oregon- a huge portion of it was self-inflicted.
When John Donahoe took over as CEO in 2020, Nike went balls-deep into its “Consumer Direct Acceleration” strategy. The theory sounded brilliant in a conference room amongst a board of suits and yes-men.
Why let Foot Locker, Macy’s, Dick’s and other retailers take a piece of the action when Nike could increasingly sell directly to you through Nike stores, Nike.com and Nike apps?
After all, the more customer data, the better margins and the more total control of the customer relationship.
They call that consultant catnip.
Nike began pulling back from wholesale partners and concentrating more of its business in its own channels. Its corporate structure was reorganized, and rather than organizing much of the product operation around sports like running, basketball and soccer, Nike shifted toward broader men’s, women’s and kids’ divisions…
And for a little while, not gonna lie, it looked fucking genius.
It was almost too perfect of timing because COVID closed physical retailers. Everybody was sitting at home ordering shit online, and Nike’s digital sales exploded- its stock price went through the roof.
The consultants could have printed the case study right there.
Actually, McKinsey basically did.
In November 2020, McKinsey published an entire piece about why consumer brands should embrace direct-to-consumer e-commerce and specifically held up Nike as an example- noting that Nike’s goal of dramatically increasing the percentage of sales coming through DTC. McKinsey wrote about the benefits of brands developing direct customer relationships and controlling their own experience. (McKinsey & Company) AKA sucked their own dick.
Then in 2023, McKinsey hosted former Nike executives for a podcast about retail growth and Nike’s digital/direct transformation.
(Read this knowing what happened next and it is almost performance art.)
"The conversation celebrated Nike’s shift toward digital, direct relationships with customers, organizational transformation and the pruning of wholesale accounts." One former Nike executive explained that Nike had stopped selling to some wholesale partners or limited what products those partners could receive as the company focused increasingly on priority accounts and DTC. (McKinsey & Company)
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Whoops.
Because then our overlords allowed us out of our cages and stores reopened.
And Nike apparently discovered something absolutely shocking- that people like buying shoes in shoe stores. (I'm no expert consultant, but maybe just maybe it has something to do with the fact sneakers aren't cheap, and how they feel on your feet makes a huge fucking difference between an enjoyable purchase and the opposite. Plus, you can't tell if you look ridiculous or not in them if you don't try them on.)
And what's even crazier, when you voluntarily remove your shoes from shelves, other shoe companies will put THEIR shoes on those shelves.
Companies like-
On.
Hoka.
New Balance.
And Adidas.
Suddenly, the consumer walking into a running store wasn’t staring at a wall of Nike shoes anymore because they had graciously surrendered physical real estate to competitors while assuming everyone would dutifully open the Nike app and buy whatever an algorithm put in front of them.
Reuters reported when Elliott Hill was brought back to replace Donahoe in 2024 that Nike’s DTC push had weakened relationships with major retailers including Foot Locker and Macy’s, contributing to market-share losses while competitors such as Hoka and On gained ground.
You cannot possibly design a more McKinsey-sounding mistake. This was straight off of page-1 from their playbook.
Step 1- Take something incredibly complicated that evolved organically over 50 years.
Step 2- Decide it is inefficient.
Step 3- Simplify it on a spreadsheet.
Step 4- fire all the institutional knowledge in the building.
Step 5- centralize and downsize everything.
Step 6- call it a some business school bullshit like "growth" or “transformation.”
Step 7- Then act shocked when reality doesn’t fit into the PowerPoint.
One of the most fascinating accusations surrounding Nike’s restructuring came from former Nike executive Massimo Giunco, whose lengthy postmortem of the Donahoe era went viral. Giunco argued that Nike destroyed enormous amounts of institutional expertise when it abandoned its sport-category structure for a gender-led organization.
(Really worth the read)
And in true McKinsey fashion, they were pounding their own kool-aid more than anybody else at the party. These guys' own published material shows how enthusiastic the firm was about the broader DTC movement. In 2023 it published another analysis arguing that companies with DTC businesses had generated stronger shareholder-value performance over the previous decade.
There’s something almost poetic about this, because the entire thing demonstrates the problem I’ve always had with giant consulting firms. It’s not that every recommendation they make is stupid, obviously they hit on some or most things, otherwise it wouldn't be a booming industry people spend tons of money going to school to learn to do, plus McKinsey employs thousands of extremely intelligent people.
It’s that there is a gigantic difference between being smart and actually knowing a business.
Some guy who spent 25 years working basketball footwear at Nike knows things about basketball footwear that cannot be recreated by combining consumer data with a fucking tableau dashboard.
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A salesperson who spent decades dealing with Foot Locker understands and has fostered and nurtured a relationship that cannot be reduced to “channel optimization.”
And a designer who has lived and breathed running culture knows why a runner chooses one shoe over another in a way that cannot be discovered by asking 1,700 consumers in a fucking focus group to rank their purchase preferences from one through five.
That human knowledge is messy, learned over long periods of time and through experience, and isn't exactly what you'd call derivative.
Consultants fucking haaaaaaaate messy.
Messy doesn’t fit nicely into boxes. So corporations hire consultants to “simplify” things and suddenly everybody who knows basketball is replaced by a centralized Men’s Consumer Insights Vertical reporting to the Senior Vice President of Operatations Under The Senior President of The Global Consumer Experience Transformation.
Fast forward three years later and Hoka is eating your lunch.
Even Nike’s new CEO basically admits their entire premise got fucked up-
Elliott Hill, a Nike lifer who returned to run the company in 2024, has been rebuilding wholesale relationships and moving Nike back toward what he calls a “balanced and integrated marketplace.” On Nike’s recent earnings call, Hill explicitly said the company had been servicing consumers through a direct-to-consumer model but was now focused on serving customers “wherever, however” they choose to shop, including sporting-goods stores, specialty retailers, department stores and other wholesale channels alongside Nike Direct.
Translation = remember that enormous transformation McKinsey convinced us to do?
We’re untransforming it.
Hill has also explained publicly that the original DTC shift made sense during COVID. Retail stores were closed, supply was constrained and Nike needed to reach customers directly.
The mistake came afterward, when physical retail came back, Nike didn’t come back with it quickly enough. Hill acknowledged that Nike had surrendered shelf space and opened the door for competitors to take market share and mindshare.
That might be my favorite part of this entire story. Because somewhere on earth there is undoubtedly a consulting presentation explaining Nike’s current strategy to rebuild wholesale, restore sport-specific expertise, improve products and reconnect with consumers. And the thing is probably like 98 fucking slides long.
It probably cost $14 million. And the conclusion is essentially- make great Nike shit and sell it everywhere people buy shoes.
Outstanding gentlemen. Hats off.
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The best part is McKinsey itself now publishes research explaining that specialized sporting-goods brands have been stealing market share from giants like Nike because consumers increasingly gravitate toward brands that feel specifically designed “for me.” Talk about moving the goalposts. Their 2025 sporting-goods report noted that challenger brands outgrew Nike and Adidas between 2019 and 2024 while the two incumbents lost market share.
No shit guys!
Maybe organizing Nike around actual SPORTS wasn’t such an antiquated concept after all and maybe somebody buying a $180 marathon shoe cares more about whether the shoe was developed by people obsessed with running than whether Nike successfully created a frictionless omnichannel consumer ecosystem.
Nike will probably recover from all of this fine because it’s Nike. The Swoosh still means something, the Jordan brand still means something and Nike still has unbelievable athletes, history, distribution, resources and brand recognition.
But think about how badly you have to fuck up for us to even be having this conversation. We are talking about Nike here. For anybody like me who grew up in the 90s. It pretty much goes Coke, McDonalds, Nike. In that order when it comes to brand awareness. Nike went from approximately $280 billion in market value at its 2021 peak to a fraction of that.
They fixed something that was never broken, because once again, C-suite people love to spend big money and will do anything to look smart, and nobody can convince them to more than consulting firms like McKinsey. And now, in September 2026, one of the most recognizable brands on planet Earth is getting demoted out of the S&P 100.
Another crowning achievement for McKinsey, because I will bet anybody, that somewhere, somebody is already sitting inside another Fortune 500 boardroom explaining how a $20 million “strategic transformation” is going to make sure none of this ever happens to them.
Just give them six months, a $25 million dollar retainer, and 145 slides to explain in detail.
p.s.- No bullshit, these No Bull shoes we had to wear for Surviving Barstool are the real deal. Actually really well made, and comfortable as hell. Big fan-