Athletics retailers advertise diversity, but does their leadership reflect it?
Editor’s Note: This article is part of a package on diversity. You can find the rest of the stories here.
The tension between outward messaging and internal criticism of corporate culture has been a defining characteristic of athletics retailers in recent years. Multiple athletics retailers were criticized in 2018 either for their treatment of women or people of color in the workplace, and for how that treatment is at odds with how they portray their brands in advertising. In many cases, those complaints haven’t gone away.
Nike faced criticism in 2019 for its treatment of female athletes during pregnancy, in addition to a class-action lawsuit alleging sex discrimination that was originally filed in 2018.
Adidas faced internal pushback over concerns about the treatment of Black employees at the company, which came to a head after Adidas’ initial response to protests against systemic racism was viewed as insufficient.
The retailer eventually released a list of actions it planned to take, including investments in the Black community and hiring goals, and since then, in September, Adidas released an update on its progress. Among its early actions, Adidas says it has strengthened its anti-discrimination and non-retaliation policy, completed listening sessions involving over 700 employees, recognized Juneteenth as a paid holiday in the U.S. and is in the process of updating its hiring and career development processes.
Nike also released a list of company actions, including investing in Black communities and recognizing Juneteenth, after initially releasing an ad campaign focused on acknowledging and putting a stop to racism. The retailer named a new diversity chief in July, and a Nike spokeswoman noted that the appointment is a structural shift to bring talent, diversity and culture together under one department head.
The move, “represents an intentional and important systemic change for Nike, Inc,” the spokeswoman said in an email to Retail Dive. “We are confident the changes we are making will continue to drive progress in this space. Our goal is to have representation at all levels of the organization with accountability that will extend throughout our enterprise.”
Indeed, as consumers and employees watched retailers react to the protests, complaints rose over companies’ willingness to market anti-racism or equality, but not act on it.
“If you don’t really understand what you’re doing and why you’re doing it, more importantly, then when times get tough, of course those are going to be the first initiatives that go out the window, even if you believe in it,” Ella Washington, CEO of diversity and inclusion strategy firm Ellavate Solutions, and a professor at Georgetown’s McDonough School of Business, said of companies that jumped on the D&I “bandwagon” after the protests.
While Nike and Adidas did both ultimately release a list of actions they planned to take, Washington said that steps taken in June don’t tell the true story of a retailer’s commitment to diversity — long-term plans do.
“Companies have to be as committed to their values as they are their bottom line,” Washington said, “and that is where we often see a mismatch between what people say and what they do.”
This has come up for athletics retail in other ways in the past. Even as many top players professed themselves to be champions for female athletes last year, the representation of women on their executive teams told a different story. And women-focused brands continue to proliferate, seeking to fill what they see as a gap in the market.
Ann Kletz, CEO and co-founder of Goal Five, helms one of those brands. Her company sells girls and women’s soccer gear, an area where fit has often been determined based on men’s products, Kletz said.
“They’re rolling their shorts, they’re rolling their sleeves, they’re pinching the side of their shirts with their headbands, and it’s just telling you immediately: this clothing, this gear does not fit,” Kletz said of girls playing soccer.
Kletz and her co-founders set out to change that, focusing specifically on bottoms, which is the “biggest pain point” for female athletes. In Goal Five’s second year of business, Dick’s Sporting Goods reached out about a partnership, hoping to bring more options to its female soccer customers.
“Lululemon built their company around a $100 tight. We’re building our company around a $50 short,” Kletz said.
While extending sizing (if only marginally), and Dick’s Sporting Goods and Under Armour teaming up to release a basketball shoe developed specifically for women, the protests this year have aligned consumers’ focus on racial diversity.
It’s an important shift not only because consumers and employees alike are demanding it, but because less progress has been made in terms of racial diversity among executives.
“They’ve talked the talk about how important diversity is from a gender and ethnicity perspective for years now. And we’ve certainly seen the needle move,” Catherine Lepard, managing partner of the global retail practice at Heidrick & Struggles, said. “I think we’ve seen the needle move more on the gender perspective than on ethnicity. I can’t pinpoint for you why, but certainly that has been the case.”
Diverse marketing is the start, not the end
The protests against systemic racism over the summer pushed retailers of all types — including many in athletics — to denounce racism publicly and speak out on social issues in ways they hadn’t before. Just this month, market leaders in the running space introduced a Running Industry Diversity Coalition to improve equity in the space.
Brian Dodge, president of the Retail Industry Leaders Association, which has a diversity and inclusion initiative of its own, said the number of retailers speaking out should not be “glossed over.” In many cases, he noted that organizations pivoted from their official statements against racism to holding town halls or other meetings with employee resource groups for Black employees or employees of color, and are looking for more ways to drive change.
“The commitment to action is deep, it’s sincere and hopefully in time it will be meaningful in its collective result,” Dodge said.
To many, though, including Lauren Bitar, head of insights at RetailNext, the company responses felt “contrived” as brands rushed to release statements. It also in some cases raised questions about how committed companies were to treating their employees well in all respects, versus only when the spotlight was on them.
“Certain big apparel brands had laid off or furloughed a ton of their organization but then gave millions towards Black Lives Matter,” Bitar said. “And Black lives totally matter — that’s a super important movement — but it felt really wrong with all those people that were furloughed or not making any money. They had the cash somewhere. It felt like they were violating a different kind of corporate responsibility.”
Dodge said that while marketing campaigns and company statements denouncing racism may not ultimately be the most meaningful steps to combat systemic racism, silence on important issues is no longer an option for retailers.
“Silence is a decision,” Dodge said. “When you don’t speak, people will make assumptions about what you think. And if that is a reality, then you need to be prepared to speak and know when it’s appropriate to do so.”
The immediacy of reactions from companies, despite not being comprehensive, may show an awareness of that. However, observers note there is a stark difference between marketing diversity and working towards meaningful change.
“There’s this assumption for many organizations that because they have connected diversity and inclusion efforts to their strategic business imperative, or they’ve been very innovative, for example, in their marketing around DE&I, that they have reached a level of maturity in this space that they really haven’t,” Washington said, adding that diversity and inclusion needs to touch every part of a company’s “sphere of influence” before that can be achieved. “Until organizations take it upon them as a responsibility to think through their entire sphere of influence around diversity, equity and inclusion, they won’t get to that place of true integration that they pretend to be at with those spiffy ads or well-crafted statements.”
One key area within a company’s sphere of influence is its employee base. While athletics retailers differ in what information they provide on racial diversity, six of nine athletics companies Retail Dive reached out to provided answers to at least some questions on employee diversity statistics. In general, more data was available about the representation of women than how many employees of color or executives of color companies have. Two companies gave employee diversity statistics on women, but did not provide any on people of color.
Most athletics retailers provided some employee diversity statistics
|Retailer||% people of color||% women|
Nike gave one of the most robust responses, catalogued in an annual impact report. A Nike spokeswoman said the company has been reporting on environmental and social impacts for close to two decades, and that the company has increased the number of senior Black leaders throughout the company since 2018.
When asked about criticism that Nike is quick to come out with marketing campaigns, but does not always reflect those values in its culture, a spokeswoman said Nike has “a long history of standing against bigotry, hatred and inequality in all forms” and that the company wants to “serve as a catalyst to inspire action against a deep issue in our society and encourage people to help shape a better future.”
Within its representation efforts, Nike is particularly focused on Black, Latinx and female employees. In the past year, the company increased the percentage of underrepresented groups at the VP-level by two points, a spokeswoman said, bringing the total to 21%. She said that measurement is core to Nike’s decision making overall, with diversity and inclusion measurement a part of that.
“The sum of the parts reflects the principles that guide every decision Nike, Inc. makes. The driving philosophy of an impact report — setting benchmarks, reporting results, learning from our experiences and then improving when we fall short — reflects an athlete’s mindset,” the spokeswoman said. “As a company that exists to serve athletes, Nike also sets targets and metrics to accelerate our efforts to contribute to a healthy planet, active communities and an equal playing field for all.”
The ability to track progress on diversity metrics is key to enacting real change, sources agreed, and that doesn’t mean abandoning powerful ad campaigns, it just means putting more emphasis on other efforts as well.
Refocusing on ‘internal campaigns’ to improve diversity
Marketing has a strong influence on a brand’s audience. When Kletz founded Goal Five, she wanted “any girl to see our website and see themselves,” and the company prioritized having ethnically and racially diverse models as a result. The company has also been laser-focused on gender diversity since the start, being a brand founded for women.
Five years after its founding, though, Kletz said the company is “not nearly as diverse as we want to be ethnically and racially,” and that’s necessitated a shift in how Goal Five approaches diversity. The company has revamped its hiring to include a process focused on seeking more diverse candidates for roles.
“We had done what startups do,” Kletz said. “When you’re in startup mode, you are so scrappy, you’re kind of grabbing your neighbor, and you’re grabbing your friend and you know pulling those people into the company.”
While it works to get a company off the ground, it doesn’t guarantee diversity.
Michelle Ngome, marketing strategist at Line 25 Consulting, also stressed the idea of changing from the inside out. A marketing campaign that features racial diversity, for example, is an “external campaign” rather than the “internal campaign” of changing one’s leadership structure.
“Once you have leadership and representation internally, you’re able to create and execute plans that are going to benefit your consumers of all backgrounds,” Ngome said, adding that good, diverse leadership leads to good, diverse marketing campaigns.
Consumers are also becoming more attuned to not just what professional athletes stand for, but also what the brands that sponsor them say and do, Erin Schmidt, an analyst at Coresight Research who studies the sportswear market, said in an email to Retail Dive.
“This year is a turning point. The Black Lives Matter movement has forced some athletic brands and retailers to look at outward messaging and corporate structure so that this is not an impediment to how consumers feel about the brand,” Schmidt said. “Brands and companies can no longer produce a superior product technically and believe that consumers will automatically choose the brand.”
Sometimes, adjusting corporate structure comes down to specific people in leadership positions that aren’t supporting employees of color. Ngome pointed to the June departure of Adidas’ HR chief, Karen Parkin, as an important step. Adidas employees had reportedly asked the company to investigate Parkin’s approach to solving racial problems in the workplace, according to the Wall Street Journal.
“I’m pretty sure she’s a nice woman, but unfortunately, she has done things that have not allowed Black employees or other employees to thrive in the workplace, which becomes problematic,” Ngome said.
Companies operating in other countries also face different requirements and cultural norms around diversity. For example, the German government doesn't collect racial diversity statistics which impacts German-based companies like Adidas and Puma. Additionally, many statistics on racial diversity may relate only to the U.S. employee base. Carlos Cubia, vice president of human resources and global chief diversity officer of Walgreens Boots Alliance, said part of the solution is having a different strategy for different parts of the world.
“We have a global vision in terms of what we want to accomplish, but we have local execution, so we look at the needs of each market — and diversity means something different in each part of the world, so what we do in the United States cannot just be overlaid in Europe and Asia and expect to have a sound strategy,” Cubia said. He acknowledged that gender is “pretty much universal,” which makes it easier to tackle as an entire corporation, but other goals must be targeted to different countries, even when it means navigating restrictions on what can be actively measured.
As it relates to tracking restrictions, though, some countries are beginning to change their stance on racial diversity, Cubia said, and some retailers are tracking it without being required to, all signs of a movement toward greater transparency.
Giving ‘her’ the court
As athletics retailers in recent years shifted their focus to cater to women, Retail Dive in 2019 took a look at the number of women who actually made it onto their executive teams and boards of directors. What we found was that there weren’t many on executive teams at all, and when women were present they often held human resources or administrative roles.
Looking at those numbers again this year, many of the same takeaways still hold weight. There were three women on Nike’s executive team in 2019, one in the role of executive vice president, chief administrative officer and general counsel, one as executive vice president of global human resources and one as president of consumer and marketplace.
Publicly available information about whether current and former executives identify themselves as non-binary and how they identify themselves racially, is not widely available. This report is based on publicly available information about companies and focused solely on the number of men and women in its analysis of these athletics retailers’ executive teams.
Executive leadership teams at top athletics retailers since 2010
Adidas had one woman on its executive team in 2019, HR chief Parkin, who left the company in June on the belief that “a new HR leader will best drive forward the pace of change that adidas needs,” the company said at the time. Under Armour, for the first time in the period we measured, had two women on its executive team last year, one as chief people and culture officer and one as president of North America.
While HR roles are important to any organization, they do not put women in charge of the product, strategy or financials for a company, and most CEOs don’t come from HR backgrounds. Andy Challenger, senior vice president at Challenger, Gray & Christmas, noted that some CEOs have had experience in HR, but most are coming from operations, sales or finance, “and those segments of companies tend to be predominantly male.”
For the companies we looked at in-depth — Under Armour, Nike and Adidas — the current year is shaping up to be one of the best in terms of the number of women on executive teams. Three of 10 Under Armour executive team members are women, the largest number at the retailer for the entire period studied, while four executives at Nike are women, the highest number in the period measured. (It should be noted, though, that Nike lists 16 total executives in the current year, so the percent of women on the executive team is lower than in 2019). Adidas, however, has lost its only female executive team member, and currently lists five men on its team.
That will change in 2021, though. Adidas in October announced Parkin’s replacement, Amanda Rajkumar, who will start at the retailer in the new year.
Current executive leadership teams at top athletics retailers
Nike, which has the highest number of women on its current executive team, has also increased the VP-level representation of women by three points, to 39%, a Nike spokeswoman said, and maintained pay equity for women globally and for underrepresented groups in the U.S. The retailer has also expanded family benefits and parental leave.
For its part, Goal Five's employees are 89% women and it has 71% female advisers, 50% female board members and 50% female investors, according to Kletz.
“It’s about being intentional,” Ngome said of hiring women into top roles, adding that conversations around diversity should lead to planning and internal audits to ensure a company is appealing to diverse candidates. “Does our messaging appeal to women? Does our careers page appeal to women? … If I have this executive role and I want a woman: Are you communicating that to the search firm that you hire? Or is it just like, ‘Oh, we have this opening. It’ll be great if we have a woman that can fill it.’”
Kletz, who worked at an executive search firm for a time before founding Goal Five, agreed about intentionality, and noted that candidates are there if teams are willing to search for them. She highlighted an experience with her daughter’s soccer club where she noticed there were no female coaches, asked the director about it, and was told they couldn’t find any.
“Clients would come to us and say, ‘Diversity is really important to us,’ and we would say, ‘Great, it’s important to us, and we guarantee that we will bring you a diverse candidate pool,’” Kletz said of her time placing CEOs. “It is a challenge in the sports industry and in the outdoor industry, but candidates are there and you just have to do your work and you have to find them.”
Having a diverse board of directors also helps. For the retailers we studied, Nike has four women, Adidas has five and Under Armour has two on their respective boards in the current year. Their past representation on the board varies as well. Nike had two or three women on its board from 2009 to 2018, and increased that to four for 2019 and 2020. Adidas had just two women from 2009 to 2013, but jumped to four in 2014 and has had four or five women on its board since then.
Under Armour had no women on its board for several years, then had one woman for a handful of years and two women from 2017 to 2020.
The board of directors at top athletics retailers since 2010
While the percentage of women on the board is hovering around 30% for Nike and Adidas, and 20% for Under Armour in the current year, according to Retail Dive's research, any growth in the number of women on athletics executive teams is an improvement in a space that’s traditionally been male-dominated. Athletics can be doubly hard for women-focused startups to break into because both the sports industry and the venture capital space are male-dominated, Kletz said.
In the long-run, having more women in leadership can only be good for traditional retailers, especially for athletics players that are hoping to cater to female customers.
“Adding diversity to both the board and operating ranks means that you’re adding diversity of thought,” Lepard said. “When you look at the retail industry, that’s really, really particularly important because we are a service industry. We are catering to an end-consumer. And for us to understand what the end-consumer looks like, I think that we have to have people in our companies at management and executive levels who mirror the demographics that we would serve because otherwise the CEO is not getting the right strategic guidance from their board and the operating team’s really having tunnel vision when they think about where the opportunities are for them to have deeper and richer conversations with their consumers.”
Athletics retailers may have a particularly long road ahead in terms of appealing to female consumers, because the sector as a whole, and therefore retailer strategies, have been male-focused. Everything, from the fit of product to the design of websites, has been aimed at men, and the athletics space needs to address each of those points to truly cater to women.
Bitar even suggested that athletics retailers might need to build out additional teams within their organizations purely to focus on the female consumer, rather than working to add women to existing merchandising, product or marketing teams. As one pain point among many, Bitar remembered a time looking at Under Armour’s site and noticing how much more navigation was available for men than for women. She said it was “off-putting” to find the differences between the men’s offering and the women’s offering, and how much more extensive the men’s section was.
Other retailers have similar issues with catering to women. When Dick’s Sporting Goods approached Goal Five about a partnership, the company told Kletz they knew they had a problem with their female customer and wanted to improve their offering in certain sports as a result.
“She comes in, and she’ll find lots of tights and running shorts and sports bras but if she goes over to the soccer area, lacrosse area, the volleyball area, she will find nothing,” Kletz said of the conversation.
After three months during the pandemic that almost doubled the company’s entire annual sales from the year before, and projections for 500% year-over-year growth this year, Goal Five determined that it is a “99.9% DTC company” and is partnering only with soccer.com outside of its own sales, but the company still has big plans to change the face of the sport. Team sales are an opportunity the company’s looking at, and the startup is also looking bigger than just soccer.
“The grand vision for the company is to go from the soccer brand for her to the very first sports brand for her, and that’s what’s so exciting to us,” Kletz said. “We’ve been hearing from day one: we heard from basketball, we heard from lacrosse, we heard from volleyball, we heard on down the line of all the team sports that they all have the same problems with their gear that soccer does.”
Now, it may be time for athletics retailers to answer for those problems.
Retail Dive’s analysis in this series focuses on representation gaps for people of color and women and is rooted in available data.
Throughout this package, when discussing multiple underrepresented racial groups, including Black, Hispanic, Asian, American Indian and Hawaiian employees, as well as employees of two or more races, as one group, we use the terms people or employees of color. We also often use the term underrepresented groups to refer to not just people of color, but other minority groups in the workplace, including women. However, not all organizations and sources use the above terms. As a result, some quotes and information provided by sources or companies may use different terms in this piece.
In tracking the leadership teams and boards of directors for Adidas, Under Armour and Nike from 2009 to 2019, Retail Dive used annual reports and SEC filings. Since Nike has a different fiscal year than Under Armour and Adidas, adjustments were made for the sake of consistency to best reflect the same fiscal year.
For Under Armour and Nike, we defined the executive team as the “Executive Officers” listed in annual filings. For Adidas, which is headquartered in Germany and does not have the same correlates as Nike and Under Armour, we defined the executive team as the “Executive Board” and the board of directors as the “Supervisory Board” listed in annual reports. In cases where an outgoing executive or board member was listed at the companies, we included it in our count.
For the current year of executive and board leadership, Retail Dive used those currently listed on company websites. We determined the gender of executives through the honorifics and pronouns the company used to refer to that employee, either in press releases, company bios or SEC filings.
In our analysis of individual companies’ employee diversity statistics, we asked all retailers included for the same six statistics: the percent of people of color and the percent of women at the leadership, board and employee levels respectively. Terminology and level of detail vary depending on the retailer’s response, and occasionally based on what country the retailer is headquartered in and local laws governing data collection.
We chose the retailer responses to include in this piece based on which retailers analyst firms identified as some of the top in the athletics space, and also which retailers and brands Retail Dive found relevant.