Under Armour, Nike Plot Cross-Trainer Comeback

Forgotten-but-Not-Gone Kicks Sidelined by Fashion Shoes Since Bo Was Big

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Remember cross-trainers, the versatile if clunky sneakers that grew explosively in the late 1980s and early 1990s? Nike and Under Armour do, and they're betting big on the shoes for 2008. In fact, the competition resulting from Under Armour's first move into non-cleated footwear could revitalize the category, which has been declining ever since Nike pitchman Bo Jackson's football and baseball careers were derailed by injuries.

'Bo Knows': The category had 'basically been in a death spiral' since the heyday of Bo Jackson, who appeared in Nike ads.

Both marketers are planning to launch lines of cross-trainers during the first half of 2008 and have indicated that the launches will be supported with robust marketing efforts the category hasn't seen since the heyday of those "Bo Knows" ads.

Analysts and executives at the marketers say cross-trainers have been derailed by at least two forces: First, a surge in one-sport specialization among youth and teen athletes has fueled a boom in specialty-shoe sales. Second, the surging popularity of so-called retro or non-performance shoes has put fashion above athletic functionality.

$807 million in sales
Despite the declines, the cross-trainer category represented about $807 million in sales last year, making it the No. 4 sneaker category behind running, retro and basketball, according to the Sporting Goods Manufacturers Association. But recent softness in specialty-shoe sales -- combined with larger concerns about the economy -- may have swayed marketers to reinvest in cross-trainers.

The category has "basically been in a death spiral since the heyday of Bo Jackson ... declining every year for at least the last 10," said Matt Powell, an analyst at Nielsen parent VNU's SportsOneSource, which tracks sporting-goods sales. "These guys are betting on a reversal."

Under Armour's planned second-quarter launch of "performance trainers" is its first footwear foray beyond cleats. Steve Battista, Under Armour's VP-brand, said the company chose cross-trainers because "training is an integral part of the life of the authentic athlete, who spends 95% of his time training for the 5% of the time" he is competing in game shoes or cleats.

Mr. Battista said the launch would be "well in advance of back to school" but wouldn't provide details. CEO Kevin Plank, however, recently told Wall Street analysts: "You will see this launch in the second quarter of 2008, but as with any Under Armour launch, you will hear the buzz building much, much earlier."

That timeline will create a collision course with Nike, which is plotting a line of cross-trainers under its Brand Jordan imprint in early 2008.

A Nike spokesman didn't respond to repeated phone calls and an e-mail inquiry, but Wall Street clearly views the competition as a plus for the long-dormant category. In a recent note to investors, Citigroup analyst Kate McShane said the launch could serve as a "catalyst" for Nike's entire U.S. footwear business and predicted the competition with Under Armour "could revitalize the category."

A spokeswoman for the other major player in the cross-trainer category, New Balance -- tied with Nike at about 40% market share -- said it also has some new cross-trainer models coming, but she declined to say whether they would receive increased marketing support.

"Cross-trainers will continue to be a focus for us," she said.
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