Athletic footwear was first developed by the ancient Greeks in order to provide protection when moving over rough terrain in varying weather conditions.
The modern athletic shoe was developed in eighteenth century England as a result of an increasing interest in the sport of running and other outdoor activities.
Joseph William Foster founded the first large-scale sports shoe company in Boulton, UK in the 1890’s. During this period, other sport shoes could be found in mail order catalogues, such as Sears and Montgomery Ward’s.
In 1917, the Converse and Keds corporations entered the American athletic shoe market.
In 1958, Joseph William Foster’s grandson renamed his grandfather’s company Reebok .
Athletic footwear forever changed in 1962 when Phil Knight and Bill Bowerman created "Blue Ribbon Sports," the forerunner of Nike.
Source: Digital Dissertations: Gurian, Brian. “The Impact of the Sneaker and the Sneaker Industry on Modern Society.” St. John’s University, 2002.
In the first half of 2002, NPD Group estimates that athletic footwear spending resulted in 1.4% year-to-year growth to $7.40 billion from $7.29 billion in the comparable year-earlier period. (Euromonitor)
Teen girls spend 75% of earnings on clothing and accessories
Comparatively, teen boys spend 52%
Loyal to footwear and apparel name brands
Generally support smaller footwear companies in tune with fashions
Comprised one-quarter of all athletic footwear spending
Advertisers attempt to reach more through non-traditional mediums (i.e. Internet)
Source: Standard & Poor’s Net Advantage
Athletic Footwear Purchases by Age Source: National Sporting Goods Association
Market Segments Source:Euromonitor 19.2% Women 20.0% Men 22.6% Male Professional 18.4% Male Crafts/Repairs 25.0% Male Executive 22.0% Male Clerical/Sales 26.6% Female Professional 30.6% Female Crafts/Repairs 22.9% Female Executive 21.5% Female Clerical/Sales Percent Purchasing Athletic Shoes Sample Market Segment
Nike- Principal business activities involve design, development, and worldwide marketing of quality footwear, apparel, equipment, and accessory products. The largest seller of athletic footwear and athletic apparel in the world. All footwear products are produced outside the United States by independent contractors. Nike places emphasis on high quality construction and innovative design.
Adidas- German based Adidas-Saloman is the second largest manufacturer of athletic equipment, footwear , and apparel in the world. Adidas America oversees marketing, merchandising, distribution, and sales of Adidas products in the U.S. Their mission is to become the best sports brand in the world. Adidas believes in creating a product to perform. Form follows function.
Reebok International- Global company engaged in the design and marketing of sports and fitness products, including footwear, apparel, and accessories. They devote significant resources to advertising products to a variety of audiences through various media. Revenues are primarily driven from wholesale distribution of products to selected athletic specialty stores, high-end retail shops, as well as sporting goods and department stores.
New Balance Athletic- A privately held company in Massachusetts, New Balance was founded as a manufacturer of arch supports and orthopedic shoes. New Balance’s mission is “to be recognized as the world’s leading manufacturer of high performance footwear and apparel.”
Skechers U.S.A.- A newer player in the athletic footwear market. A global leader in the lifestyle footwear industry, Skechers designs, develops, and markets lifestyle footwear that appeals to trend-savvy men, women, and children. Product offerings have grown from utility-styled work boots to include sports, casual, dress, dress casual, and roller skates.
According to Forrester Research, 69% of teens said that when they find a brand they like, they remain loyal
Firms use celebrities and athletes
Nike: Michael Jordan and Tiger Woods
Skechers: Brittany Spears
Adidas: Kobe Bryant
Source: “Drivers of Change,” http://www.duke.edu/web/soc142/team2/drivers.html
2001 Competitor Ratio Analysis Source: Bloomberg and Adidas consolidated financial statements, financial information unavailable for New Balance 14.26 20.55 15.36 Return on Net Worth 2.88 2.07 2.26 Current Ratio 5.01 2.74 4.29 Inventory turnover 6.83 5.09 10.82 Return on Assets 6,700 13,941 22,700 # of employees 53.34 74.35 40.41 Total Debt/Equity 5.21 3.41 6.7 Profit Margin Reebok Adidas Nike Ratio
Apparel and footwear sales are driven strongly by economic conditions, demographics, and pricing
With expected economic recovery in 2003, footwear sales should begin a gradual recovery
A wave of consolidation is expected as firm’s attempt to gain leverage in distribution channels. The slow economy has led athletic footwear manufacturers to lay off workers, freeze hiring, find less expensive sourcing, and cut non-fixed costs like technology, travel, and entertainment
“ Footwear Production.” US Census Bureau. 15 Jan. 2003 <http://www.iteds.treas.gov>.
Gurian, Brian. “The Impact of the Sneaker and the Sneaker Industry on Modern Society: A Review of the Transformative Powers of an Icon.” St. John’s University. 2002. 15 Jan. 2003 <http://wwwlib.umi.com/dissertations/preview_all/3056600>.
Howell, Mike McNulty. “Footwear Industry Weathers Economic Storm.” Rubber & Plastics News . 7 Oct. 2002.
Lazich, Robert S. “Sports Shoe Market.” Market Share Reporter (Detroit: Gale) 2003.
New Balance. “Fact Sheet.” 15 Jan. 2003 <http://www.newbalance.com>.
Nike. Edgar Online, Inc. “10K report for Nike.” 14 Jan. 2003.
Reebok. Edgar Online, Inc. “10K report for Reebok.” 14 Jan. 2003.
“ Research and Statistics.” National Sporting Goods Association. 14 Jan. 2003 <http://www.nsga.org/public/pages/index.cfm?pageid=328>.
Skechers. Edgar Online, Inc. “10K report for Skechers.” 14 Jan. 2003.
Taylor, Sarah. “Phoning It In; Footwear Is Now One of the Fastest Growing Categories for Home-Shopping Networks QVC; HSN and ShopNBC; Vendors Couldn’t Be More Thrilled, but Retailers? That’s Another Story.” Footwear News. 29 Jul. 2002.
“ US Sporting Goods Market Outlook 2002.” SGMA International. 14 Jan. 2003 <http://www.sgma.com/sgma-press-releases.html>.