Despite Its Way With Women, Underdog Reebok Fixates on Nike

Shoemaker Signs NBA Top Draft Pick in Bid to Catch Up to Market Leader. But Why Bother Competing in Category It Can't Possibly Win?

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NEW YORK ( -- Last month, prior to the National Basketball Association draft, University of Kentucky star John Wall tweeted, "Signed wit #Reebok ... leegggoo!!" after agreeing to a five-year, $25 million deal that includes a signature shoe due out in October.

With all due respect to Mr. Wall, who ended up being the No. 1 overall pick by the Washington Wizards, that news elicited a figurative retweet of "WTF?" from many in the sneaker and sporting-goods community.

Observers are wondering why Canton, Mass.-based Reebok, after successfully readjusting its focus to target the women's market, and making great gains with both its ZigTech training shoe and its Easy Tone sneakers, would get back into the basketball-shoe endorsement business when that sector of the sneaker world is losing market share.

Wonder no more.

"Yeah, we've worked very hard and we've had some success in the last 10 to 12 months, so we're reinvesting that success back into the brand in the right places," said Rich Prenderville, VP-global brand marketing for Reebok. "Look, you don't see a sports marketing announcement come out from us once a week or once a day. We're about quality. This is totally on strategy for us." Mr. Prenderville said Mr. Wall is the perfect player to bring the ZigTech, heretofore a training shoe, to the basketball court.

But others don't see it.

"I don't get it. I have to be honest, I don't get it," said Matt Powell, an analyst with SportsOneSource, a Charlotte, N.C.-based online sporting goods industry newsletter. "If I were them, since they have such a hot hand with the ZigTech running shoe and the toning shoe, I would play that real hard."

Aaron Kreielsheimer, managing editor of, said Mr. Powell is "definitely not the only one asking 'Why?' when it comes to the John Wall-Reebok deal. Obviously, it's been a while since Reebok has been a legit player in the basketball market, but there's a legacy there."

Reebok's long history
Indeed, Reebok has a long history in the basketball-shoe market, with everything from its iconic "Pump" sneaker, introduced in 1990, to its high-profile endorsement deals with Shaquille O' Neal, Yao Ming and Allen Iverson, among others. But both Messrs. Yao and Iverson have been injury prone the last several years, and Mr. Iverson actually left the Philadelphia 76ers before the conclusion of this past season to care for his ill daughter. That's made Reebok virtually irrelevant in the basketball-shoe market in the last three to four years.

In the meantime, though, it has re-established itself in other ways. Reebok debuted in the U.S. in the 1980s as an aerobics/women's footwear company and recently returned to those glory days with the ZigTech training line and the Easy Tone sneaker brand that the company says tones legs and buttocks while walking. Advertising Age reported last month that Reebok nearly tripled its market share in women's footwear in the last year -- jumping to 8% from 3.3% -- prompting Herbert Hainer, CEO of Reebok parent Adidas, to say, "We are well on track to selling at least 5 million pairs of toning footwear in the U.S. alone this year."

Mr. Hainer has since revised that number, telling analysts during an earnings call last month: "Reebok will grow at a double-digit rate in North America this year. Also I believe we could now sell up to 10 million pairs of toning footwear globally this year."

Mr. Prenderville said the sneaker-maker will bring Mr. Wall along slowly. One 30-second spot to introduce him, from agency-of-record DDB, debuted last month on draft night. A more comprehensive campaign is slated for the fall, when the Wall shoe hits the market. "He's genuine, and he's a good fellow. We'll have a slow build-up as we take John forward, but we'll have a fully integrated marketing campaign," Mr. Prenderville said.

It will need it. According to SportsOneSource, while the overall sneaker market in the U.S. is valued at $17.4 billion -- Nike owns 35% of the market to 2.6% for Reebok -- the basketball-shoe market is a $2.4 billion business, down 17% from 2005. Nike has 93% of that basketball-shoe market share -- 73% from its Air Jordan brand (still the best-seller some seven years after Michael Jordan's retirement) and 20% from the Nike brand, including signature shoes from LeBron James and Kobe Bryant. Adidas was No. 3 at 2.7% and Reebok fourth at 1.6%.

'Better be good'
"The 'hero shoe' business has really turned into the LeBron shoe, the Kobe shoe and the Jordan stuff," said John Horan, publisher of Sporting Goods Intelligence. "Reebok basically conceded the market to Nike, but now they feel this is the tie to get back in that business. Reebok gets a break because John Wall is going to a big market, I-95 team in Washington. But the kids that buy these shoes are very discriminating. The product better be good, and John Wall better be good."

Mr. Wall was a "one-and-done" player -- a high-school standout who played only one season of college basketball --but he was fantastic in his only year at Kentucky, leading the Wildcats to the Southeastern Conference championship and into the Elite Eight of the NCAA Tournament.

He was long considered the best player in this year's draft, yet for all his talent he certainly didn't have the hype or charisma of, say, Mr. James, coming into the league. Mr. Wall was courted by Nike, Under Armour and, curiously, China-based sneaker company Li N ing.

"The fact is that at Nike, John Wall would still be a fairly small fish in a very crowded and intimidating pond with LeBron, Kobe and [Kevin] Durant already way in front of him," SneakerNews' Mr. Kreielsheimer said. "Of course, we'll have to wait to see how it all plays out, but there's no question that the press and media attention that his Reebok deal and introduction have already received is likely much grander than a deal with Nike would have brought. He could have been just another star among stars at Nike, but now he gets to be the guy for Reebok."

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