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Philip H. Knight got his start selling Japanese sneakers from the trunk of his car. Nearly 40 years later the former University of Oregon distance runner has built a $12.3 billion sports behemoth. And Knight, 66, is finally stepping back from running Beaverton (Ore.)-based Nike Inc., having pulled it away from the brink of irrelevance and whipped it into the best financial shape ever.
In the 1980s and 1990s, Knight forever changed the rules of sports marketing with huge endorsement contracts and in-your-face advertising. Later, Knight and his team transformed high-performance sports equipment into high-fashion gear. Then, just as suddenly, Nike lost focus. In early 2000 kids stopped craving the latest basketball sneaker. Nike's image took a huge hit from its labor practices. Sales slumped, and costs soared.
Thus began Knight's second act. He revamped management and brought in key outsiders to oversee finances and apparel lines. Knight devoted more energy to mundane details such as developing top-flight information systems, logistics, and supply-chain management.
Today, Nike's earnings are less volatile and less fad-driven. And it still spins off tons of cash. In the fiscal year ended on May 31, Nike earned nearly $1 billion, up 27% from the previous year, on 15% higher sales. Knight says this is the moment to relinquish some of his executive responsibilities. In mid-November he named as CEO William Perez, 57, formerly chief of S.C. Johnson & Son Inc. As Nike's largest shareholder, Knight will remain chairman. His job now is to make sure newbie Perez can sprint with the best of the Nike