TIME: Almanac 1995

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<text id=89TT2215> <title> Aug. 28, 1989: Foot's Paradise </title> <history> TIME--The Weekly Newsmagazine--1989 Aug. 28, 1989 World War II:50th Anniversary </history> <article> <source>Time Magazine</source> <hdr> BUSINESS, Page 54 Foot's Paradise </hdr><body> With a mix of fashion and engineering, athletic shoes leap off the shelves By Barbara Rudolph Jennifer the Valley Girl, whose most strenuous exercise consists of cruising the local shopping mall, favors $64 pink L.A. Gear athletic shoes with Western-style, imitation-silver buckles. Arthur the accountant, who bicycles ten miles before picking up his calculator in the morning, wears TC Lite, Nike's $85 cycling model. His weekend tennis partner rushes the net in Reebok's $80 Italian-made Cosenza tennis shoes, with the brand name discreetly scrawled in the corner. Only fuddy-duddies still think of sneakers as inexpensive, all-purpose athletic shoes with heavy rubber soles. Today's models are an exacting mixture of fashion and technology, composed of such materials as synthetic leather and Hexalite, a cushiony substance used in Reebok's newest soles. Not just athletic shoes, they are space-age wonders that boast such features as air-cylinder suspension systems, anatomically molded ankle collars, outrigger soles and adjustable support straps. They answer to names like Air Skylon, 360 Jam, Disc-Drive and Tiger Gel Epirus. Manufacturers are bombarding customers with different models for "technical" and "nontechnical" running, for walking, wrestling and even coaching and cheerleading. As a result, Americans are lacing up 200 million pairs of brand-name athletic shoes a year. Not satisfied to sell only shoes, companies are diversifying into T shirts, sweaters and shorts emblazoned with their names. All told, the market for athletic shoes will reach $9 billion in retail sales this year, up about 15% from 1988. In a grueling race for market share, once sagging Nike is racing back with revenues of $1.7 billion for the fiscal year that ended in May. Analysts estimate that Nike now claims a 26% share of the market for brand-name athletic shoes. Based in Beaverton, Ore., the company is nosing ahead of its archrival Reebok, which controls about 22% of the market. Striding into the No. 3 position is trendy L.A. Gear, which has grabbed about 13% by selling shoes designed more for fashion than performance. Among the runners-up: Converse, Adidas, Keds and New Balance. When the jogging and fitness craze began in the mid-1970s, athletic-shoe manufacturers were dubbed "Adidas and the Seven Dwarfs." But by the early 1980s, while West Germany's Adidas remained No. 1 outside the U.S., fast-rising Nike dominated the American market. The company was started in 1972 by current chairman Philip Knight, 52, a University of Oregon graduate, and Bill Bowerman, 78, his former track coach, who used a waffle iron to make their first soles. (The now famous Swoosh trademark on the side of the shoes was designed by an art student for $35.) Nike's sales sprinted from $270 million in 1980 to $920 million in 1984. But the firm, named after the Greek goddess of victory, had trouble managing its explosive growth. Not long after the company tried to meet increased demand by assigning more production to Chinese factories in 1985, Nike's quality inspectors were rejecting four out of five of the Chinese-made shoes. Nike's push to satisfy the expanding mass market eroded its performance image. As Nike faltered, Reebok galloped ahead. Beginning its life in the U.S. as a subsidiary of a British shoemaker founded in the 1890s, Reebok, based in Canton, Mass., is now a publicly held firm that owns its former parent company. Its mid-'80s success came from inventing and persistently exploiting the market for women's aerobic shoes, a shift in the business that Nike had completely missed. Reebok's revenues zoomed from $4 million in 1982 to $900 million by 1986. This year Nike, which Knight has invigorated by decentralizing decision making and encouraging innovation, has gained a second wind with dozens of new models in 24 footwear categories. Nowadays any top contender in the industry must constantly upgrade its products (almost all of which are designed in the U.S. but made in Asia) just to stay in the race. Though industry analysts estimate that 80% of all sneakers are used for nothing more taxing than taking out the garbage, consumers want the illusion of having a competitive edge. Shoe designers finely tune each category of shoe to its particular activity by studying human motion and physiology. Reebok's baseball shoes, for example, have a specially designed cleat pattern called SpeedSlot for fast starts and stops. Crafty Nike marketeers have also invented in-between products, most notably the cross-trainer shoe, designed for an all-around athlete. Cross-trainers offer enough lateral support for the sideways motions of aerobics and basketball but are light and flexible enough for jogging too. On the cutting edge of shoe science, Nike and Reebok are engaged in a battle that is based on thin air. The Air Nike line of basketball shoes, which contain pockets of compressed gas in the soles to provide cushioning, became an instant hit two years ago when transparent plastic windows were added to show off the air cells. The most popular model is the Air Jordan (price: $110), named for Chicago Bulls superstar Michael Jordan, who receives an undisclosed royalty for each pair of shoes sold. This year Reebok is fighting back with its Energy Return System, found in its ERS Showtime model (price: $79). Its soles contain an arrangement of cylinders, made of a synthetic called Hytrel, which compress on impact and provide extra spring. Taking the next engineering leap, both Reebok and Nike have developed shoes with inflatable sides and collars for extra support. Not every manufacturer is chasing the perfect technology. L.A. Gear has become a major contender by selling shoes mostly for show, not sport. Adorned with bright-neon trim, buckles and rhinestones and worn by svelte blonds in the company's TV commercials, L.A. Gear's shoes suggest sex and Southern California. One of the brand's top sellers is Street Brats ($60), with contrasting-color laces, marbleized leather and tongues that stick straight up. L.A. Gear was started in 1979 by Robert Greenberg, 49, a hairdresser turned entrepreneur who keeps his finger on the pulse of California shopping culture. Says he: "I'm a mallaholic. I need to go to a mall at least twice a week, or I get the shakes." Sales at L.A. Gear accelerated from $11 million in 1985 to $224 million in 1988 and are expected to more than double this year. A shoemaker's fortunes rely heavily on advertising. Nike's theme, "Just Do It," which urges would-be customers to get off their couches and onto their exercise bicycles, has been widely praised. But Reebok's recent "Let U.B.U." ad campaign, which starred eccentric characters in surrealistic situations, was considered a bust. All the major manufacturers have hired celebrity pitchmen. Nike pays multitalented pro athlete Bo Jackson to sell its cross-trainer shoe, and Joan Benoit Samuelson to advertise its running line. L.A. Gear keeps retired Los Angeles Lakers star Kareem Abdul-Jabbar on its payroll; his former coach Pat Riley is under contract with Reebok. Having paid heavily to pump up their images, footwear-makers capitalize on their cachet by emblazoning their emblems on clothing. Nike, whose apparel sales reached $208 million in fiscal 1989, sells hundreds of garments ranging from lemon-colored cotton jerseys to hot-pink bicycle shorts. Next spring Nike will launch an Aqua Gear line for wind surfers and other hardy types. Manufacturers are furiously bringing out new clothes and shoes, in part because they know that the industry's rapid growth is slowing down. Baby boomers, for example, are slacking off in their exercise regimens. While last year's 15% growth rate was healthy by any measure, it was down from 29% the previous year. As they pour money into R. and D., the shoemakers hope to come up with new products that weekend athletes can't resist. One new customer of note: Batman, whose movie shoes were based on Nike's cross-trainer. </body></article> </text>