The boss of Nike will step down next month, making way for a company veteran to take his place as the leader of the world's biggest sportswear company amid tough competition in the retail sector.

In a statement, Nike said John Donahoe will retire on 13 October, staying on in an advisory role until early next year to "ensure a smooth transition".

Demand for the company's trainers has been faltering in international markets like China and the company's stock price had slumped.

Shares rose more than 9% in after-hours trading, however, following the announcement that Elliott Hill would return to the firm.

Mr Donahoe was responsible for boosting Nike's online presence, as well as driving more sales directly from customers instead of partnering with other shops on High Streets or in shopping centres.

He joined the company's board in 2014 before taking on the role of chief executive in 2020.

His tenure has been challenging with huge shifts in the retail landscape during the pandemic and as inflation spiked in the following years.

The footwear firm has also faced tough competition from the likes of newer rivals like On and Hoka, which some analysts have described as being more innovative and on-top of current trends.

Nike had been hoping that new products and a marketing campaign around the Olympic Games in Paris would help bring shoppers back to the brand.

But in the announcement on Thursday, it said that the board and Mr Donahoe had "decided he will retire from his role".

“It became clear now was the time to make a leadership change," Mr Donahoe said, adding that Elliott Hill is the right person for the job and he was looking forward to seeing his future success.

His successor, Mr Hill, retired from the company just four years ago after serving in a number of senior leadership roles in Europe and the US.

He said he was "eager to reconnect" with employees he had worked with in the past.

"Together with our talented teams, I look forward to delivering bold, innovative products, that set us apart in the marketplace and captivate consumers for years to come," he added.