Philip H. Knight resigned yesterday as head of the Oregon sneaker company that he built into Nike Inc., a global sportswear powerhouse that made everyone want to soar in Air Jordans, Wear Yellow and Live Strong Like Lance and, most of all, Just Do It.

Knight, 66, is widely credited with having invented the concept of sports marketing in all the money-drenched glory it is known for today. For good or ill, his fat endorsement contracts and innovative marketing campaigns elevated athletes such as Michael Jordan, Bo Jackson and Lance Armstrong to the status of international icons.

"He created an entire industry [of sports merchandising] basically on his own," said Marc Ganis, president of Sportscorp Ltd., a Chicago consulting firm. "By and large he's made athletes richer, he's made athletic footwear and athletic clothing a luxury item, and he has turned a small company in Oregon . . . into an international goliath."

Nike, based in Beaverton, Ore., has also faced criticism under Knight's 32-year leadership for exploiting workers in sweatshops in Asia and for making athletics more about cash and status than simple competition. But the company worked to improve the conditions of its workers and has had a breathtaking record of growth and market success.

Knight has been paving the way for his retirement as chief executive since early last year, when he asked the company's board of directors to start searching for a replacement. Yesterday, Nike said it had hired William D. Perez, 57, who has been president and chief executive of the privately held consumer products company S.C. Johnson & Son Inc., makers of the Raid and Off brands of bug sprays.

Perez, who the company said has participated in 11 marathons and has worn only Nikes for 27 years, will take over as president and chief executive. Knight will continue as chairman of the board of directors.

Knight's departure from day-to-day operations marks the closing of a legendary chapter in American business. A former middle-distance runner at the University of Oregon, Knight started a shoe company call Blue Ribbon Sports in the early 1960s with his coach, Bill Bowerman. The two men each contributed about $500.

Today, as the swoosh-labeled Nike, the company has more than 24,000 employees; it sold $12.3 billion worth of products in fiscal 2004.

At first, Knight and Bowerman imported Japanese shoes and sold them out of a van at track meets. But Bowerman wanted to make better designs, supposedly studying his wife's waffle iron for ideas.

After taking the Nike name in 1972, business began to take off when the company signed its first star athlete: legendary runner Steve Prefontaine, who helped make further shoe design improvements.

Knight "began to really see the power of using athletes" to popularize the brand, said Paul Swangard, director of the Warsaw Sports Marketing Center at the University of Oregon.

It was in the early 1980s that Nike began to mushroom after it associated with a young University of North Carolina basketball star named Michael Jordan. The Air Jordan basketball shoe, which debuted nearly 20 years ago, went through many configurations to become the best-selling sports shoe ever.

It was more than a shoe; it was a costly status symbol that seemed to give its wearers a connection to Jordan's wizardry and dominance on the basketball court. Desire for the shoe became so great that schoolkids sometimes committed acts of violence to get them.

Knight was known to spend jaw-dropping amounts of money to keep his athletes on retainer; just last year, Nike signed basketball star LeBron James, barely out of high school, to a $90 million endorsement contract. Shoe company officials also became part of the entourage of any big-time pro athlete.

"That is a Phil Knight creation, the idea of having reps of a sneaker company be in effect personal valets of star athletes," Ganis said. "Some of these things were not good. . . . But they think very big at Nike. And that has come from the top."

Nike CEO Philip H. Knight, left, is credited with virtually inventing sports merchandising. His replacement is William D. Perez, right.