Nike finds a way to go to Wal-Mart

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High-brow athletic-shoe purveyor Nike has cut an exclusive distribution deal with low-price leader Wal-Mart. But you won't find its signature swoosh there.

Instead, Nike's Starter brand, produced from its Exeter Brands Group subsidiary, has developed a product line to be sold exclusively at Wal-Mart. The Starter line, which includes a basketball and running shoe for men and a walking and running shoe for women, rolls out in 400 stores this week and retails for around $40.

That's far less than Nike usually charges for its shoes, but pricier than what Wal-Mart usually sells. In fact, this will be the first athletic shoe offered by the Bentonville, Ark.-based chain, which usually sells casual sneaker-wear.

Longtime Green Bay Packers quarterback Brett Favre is endorsing the Starter brand in print ads and TV commercials, produced in-house by Nike, that will appear in-store on Wal-Mart TV and on spot cable in Texas and Florida, where many of the 400 stores are clustered.

"For us, it's value-innovation footwear," said Wal-Mart spokeswoman Jacquie Young. "We're excited about it. We'll see how the test goes and then look at other opportunities to expand into other markets."

The Nike name will not be included anywhere on the product or the advertising. But observers and analysts say it is a smart move by the Beaverton, Ore., marketer, which has long tried to figure a way to get more product to less expensive retailers without devaluing its signature brand.


"It's a great way for them to broaden their distribution, exclusive of the Nike brand that they've already established at certain price points," said Jennifer Carafano, athletic, outdoor and children's editor at Footwear News. "It's hard to grow product right now in a stagnant athletic market, so the general consensus is that this is a good deal for Nike."

For Wal-Mart, it's business as usual. The retailer has had a number of controlled-label brands in recent years, including the Levis Signature brand of jeans, created specifically for Wal-Mart in 2002 before being made broadly available to other mass merchandisers.

contributing: jack neff

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