Sun, Mar 09, 2003 - Page 11 News List

Reebok streaks into contention

SNEAKERS The sporting-goods manufacturer may have a chance to at least double its market share in the next few years as Americans begin to shun Nike's costly shoes


New Reebok products shown on display in a Manhattan store front last month. Analysts say Reebok has a good chance to double its market share in the next few years.


The Nike streaker, clad only in scarf and shoes with the swoosh, starts across the soccer field when -- surprise -- out of nowhere comes a brawny football player with a red Reebok jersey who tackles the streaker and knocks him to the ground.

This commercial -- a parody of Nike's successful streaker commercial featuring Reebok's own "Terry Tate, Office Linebacker" character -- rates as a "gotcha" for Reebok, the one-time sneaker king that spent the 1990s watching Nike's dust.

Now Reebok says it is roaring back, led by Paul Fireman, the 58-year-old CEO who transformed the company from an obscure English custom shoe business to the biggest athletic shoe company in America by 1987 -- about the same time he was kicked upstairs and replaced by C. Joseph LaBonte, a Harvard business graduate and former head of the 20th-Century Film Corp.

"There is a certain wish for vindication," Fireman, who never graduated from college, conceded in a recent interview.

Reebok, along with the other athletic shoe companies, still trail Nike: Sporting goods intelligence, a trade newsletter, estimated that, at the end of last year, Nike had 39.1 percent of the nation's athletic shoe business; Reebok had 12; New Balance had 11.6; and Adidas had 9.6 percent.

But analysts say Reebok has a good chance to at least double its share in the next few years. Since Fireman regained day-to-day control in November 1999, the Canton, Massachusetts, company has increased sales, increased cash and increased exposure.

In the fourth quarter of 2002, Reebok's total sales increased a better-than-expected 14.8 percent, to US$763 million. Clothing sales in the US grew 48.1 percent, to US$145 million. According to a Lehman Brothers report on Feb. 5, Reebok has had 11 consecutive quarters of sales increases.

"We are the No. 2 company in America," Fireman said. But ranking, he said, is not his priority.

"Right now, I'm not sure I want to surpass Nike's volume -- we did that once," Fireman said.

"As much as I want to be the No. 1 aspirational brand, we're on a good path now and if this escalates into a competition between Nike and ourselves and Adidas, then I'm happy with that, too."

Right now, Reebok is rushing to fill the empty shelves in the US' more than 2,500 Foot Lockers after Nike and Foot Locker, the world's largest athletic footwear chain, had a falling out.

In February 2002, Foot Locker told Nike the store wanted to reduce the number of Nike's marquee shoes, because it believed consumers were turning more to the mid-priced shoes.

According to a person close to the deal, Foot Locker told Nike it wanted to reduce its marquee shoes from 12 percent of the chain's business to 6 percent, and canceled US$150 million in Nike orders.

Nike struck back. Nike denied that it had pulled back on existing orders or punished Foot Locker with late shipments, as had been reported.

"But Foot Locker will no longer be a primary distribution for marquee and launch products," said Charles Denson, the president of Nike Brand, in a December call with analysts.

On Feb. 15, Nike's "Hall of Hoops" displays in the nation's Foot Locker stores were replaced by Reebok's "Above the Rim," featuring RBK shoes and jerseys and hats endorsed by Allen Iverson, the Philadelphia 76er star. Reebok has also filled the vacuum with more of its Classic line, part of the retro look that has been successful for such sneaker also-rans as Converse and Puma.

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