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Jordan, 50 cent & Jay-Z: A funky fit?
Music endorsements, retro styles may boost footwear sales in a stagnant market; red suede sneakers?
February 9, 2004: 7:36 AM EST
By Parija Bhatnagar, CNN/Money staff writer

NEW YORK (CNN/Money) - Move over Michael Jordan, LeBron James, Shaquille O'Neal. Faced with lackluster sales of sporting goods -- and fading euphoria over big-name athletes -- Reebok's ongoing experiment with the world of hip-hop and rap could show the industry the way back to growing sales.

Industry watchers say the recent fusion of sports and entertainment, particularly in the marketing of athletic footwear, could revitalize footwear sales.

"Young kids and teenagers are exposed to music celebrities a lot more than they are to athletes, and companies are capitalizing on that fact," said Larry Weindruch, spokesman for the National Sporting Goods Association (NSGA).

Weindruch adds that the high cost of athlete endorsements and the recent scandals involving L.A. Lakers guard Kobe Bryant and ex-NBA star Jayson Williams are two other reasons companies could shy away from signing star athletes.

Reebok seeks musical inspiration

Reebok International, the No. 2 maker of athletic footwear, last year signed two exclusive deals, one with hip-hop artist Jay-Z and the other with rapper 50 cent. The limited-edition Jay-Z "S. Carter" collection became the fastest-selling shoe in Reebok's history, according to Reebok spokesman Kejuan Wilkins.

Wilkins declined to comment on the value of the deals or how many pairs of the shoes were sold. But published reports indicated that more than 10,000 S. Carter models sold out in just a few hours after hitting stores in November.

Meanwhile, rapper 50 cent's "G-unit" collection from Reebok, which also launched in November, was another wild success for the company. Spot checks at a few Footlocker stores in the New York City area showed retailers had a tough time keeping shelves stocked over Christmas.

Reebok's  
Reebok's "S. Carter" collection featuring hip-hop artist Jay-Z

Said Wilkins, "Those two models did extremely well for us. But the S. Carter and the G-Unit aren't performance shoes. They're more lifestyle products. Their buyers are more focused on fashion trends than on the sports element."

That's the key, said Marshal Cohen, industry analyst with NPD Fashionworld, which tracks trends in the clothing and footwear industries.

"The fashion wardrobe for teens and young adults today is focused on trendy shoes," said Cohen. "Footwear is the signature piece, especially in the urban markets, that these consumers are using to express who they are."

Setting the pace

It's been tough going lately for the $75 billion U.S. sporting goods industry, which has seen sales mostly flat year-over-year. In fact, total sales in 2002 slipped one percent over the previous year, according to the National Association of Sporting Goods (NSA).

The industry's largest trade group expects a better performance in 2003 of about a 2 percent increase in total sales from a year ago.

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"Sporting goods sales have suffered because Americans have become too sedentary," said Mike May, spokesman for the Sporting Goods Manufacturing Association (SGMA).

"The computer industry is not in the best long-term interest for us. The increased use of computers, e-mails, computing games and other electronic entertainment gadgets has cut into people's free time," said May.

At the same time, May thinks sports footwear -- a $16.4 billion market -- could become a bright spot.

"We think footwear sales could rise by as much as 3 percent in 2004, while total industry sales should grow by a little over one percent, said May.

NPD's Cohen agrees. "Sports footwear usually is also the first place urban consumers will spend money to endorse a celebrity. As we've already seen, people will pay over $100 for the G-Unit or an S-Carter Reebok if it creates the right image for them."

The next wave: More retro or high-tech?

Reebok's rival Nike isn't seeking entertainment celebrities to pitch its brand -- yet. According to Nike spokesman Nate Tobecksen, the company currently has no formal relationships with celebrities outside of the sporting world.

Instead, the company is looking within and reintroducing a few of its past hits.

Nike, the No. 1 athletic shoe brand recently brought back two retro styles -- the Air Max running shoe from 1987 and the Rift split-toe shoe from the mid 90s.

In 2004, Nike will re-release its Delta Force model from the late 1980s and its Air Alpha Force II retro basketball shoe from the early 1990s, Tobecksen said.

"The retro trend in sportswear is also very big right now whether it's in footwear or sports jerseys," said NSA spokesman Larry Weindruch, adding that retro basketball shoes should be the hot trend this year.

Puma, however, is bucking the retro trend. Instead, the company sought inspiration from areas such as motor sports for its new line of shoes expected out in the fall, including a red suede sneaker.

Puma typically doesn't enlist the help of famous non-sports celebrities to pitch its brand. But given Reebok's success with 50 cent and Jay-Z, the company said this may be a possibility down the road.  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.