Athletic Shoe Giant Plays Catch-up to Rivals' Strategies

By Published on .

NEW YORK ( -- Mired in a stagnant $17 billion athletic-footwear market, Nike is trying to juice up its business by launching an upscale urban fashion line.
Blue Ribbon Sports, which was the original name of the company that later became Nike, has been resurrected as an urbran fashion wear line.

The company has quietly introduced Blue Ribbon Sports -- the company’s original name as coined by founder Phil Knight -- an exclusive brand of urban-themed clothing available only at high-end retailers such as Barney’s and Fred Segal.

Following Adidas
The move comes as Adidas extends for fall its hot-selling Stella McCartney-designed workout line, sold in the likes of Bloomingdale’s, and follows linkups by other athletic-shoe marketers with designers from Alexander McQueen to Jil Sander.

While the athletic-footwear market was up 3.1% in 2004, it was flat for two years before that, according to NPD Group, a period during which the $39 billion active-wear-clothing market grew 5%. But it’s not simply sales potential motivating Nike and its rivals.

“These are collection statements,” said Tom Julian, trend analyst for Publicis Groupe's Fallon Worldwide. “Everyone wants to be a brand of choice. Many of them are going into their own retailing world with their own showcasing, and they need to make sure they have that cool product.”

Sean Combs
Nike wouldn’t comment on the line. But industry insiders said Nike has brought in designers from Sean John, the clothing line started by rapper Sean Combs, also known as "P. Diddy" and "Puff Daddy," to help design Blue Ribbon’s sweaters, belts, blazers, jeans and woven shirts.

The products are showcased in a Blue Ribbon Sports section on the Nike Web site. The opening page “manifesto” says that “In 1962, a young visionary named Phil Knight had an idea for making better running shoes. Armed with little more than ambition and savvy, he set about turning it into a small company that would one day become Nike. Over four decades later, Nike is bringing that same spirit of innovation to revolutionize street wear under the name that started it all -- Blue Ribbon Sports -- shoes and apparel for the next generation of visionaries.”

Rivals out in front
In reality, Nike finds itself in the atypical position of playing catch-up to Adidas, Reebok and Puma, sneaker and apparel companies that have already introduced such lines and have also done it by collaborating with celebrities and designers.

John Horan, publisher of the newsletter Sporting Goods Intelligence, said, “The trend-setter doesn’t want something that’s already available at Foot Locker.” That thinking inspired the Adidas/Stella McCartney line, as well as one from rapper Missy Elliott called Respect M.E. Unlike Nike, which is not actively advertising Blue Ribbon Sports, Adidas is touting the McCartney line in print ads from Omnicom Group's TWBA/Chiat/Day, San Francisco.

Reebok, which has produced two successful shoe lines from rappers Jay-Z and 50 Cent, collaborated with Diane von Furstenberg on the RBK by DVF women’s line. Reebok’s apparel sales were up 26% last year, besting the 20% increase in footwear sales. Puma, which recently announced it would expand its businesses in a bid to overtake Reebok as the world’s third-biggest sneaker and apparel company behind Nike and Adidas, has commissioned Alexander McQueen to design a shoe line.

Keeping up with the Joneses
For Nike, which has a dominant 40% share of the sneaker and apparel market in the U.S., it’s a matter of keeping up with the Joneses, said John Shanley, an analyst with Susquehanna Financial Group, an institutional research, brokerage and trading firm headquartered in Bala Cynwyd, Pa.

Blue Ribbon Sports “allows [Nike], through ordering much smaller quantities from suppliers, to get a read in terms of consumer reaction before they introduce something into the main component of the overall product line,” he said.

In this article:
Most Popular