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The shoe is now on the other foot for outdoor footwear.

After years of double-digit growth at the expense of the athletic footwear category, the diverse rugged footwear market is facing shifting fashion trends and oversaturation.

Sales among the category's top 20 players exceeded $1.2 billion in 1994, up about 33.3% from '93. But despite early-year projections of continued gangbuster growth, the category is slowing, with athletic footwear rebounding and "category killers"-mass-merchants and low-price latecomers-barging in.

"The fashion boom is over," said Steve Gladstone, marketing manager at outdoor shoe marketer Merrell. "Now, most of us are returning to our roots....and focusing on our core consumers: the outdoor enthusiast."

No company is scrambling more than category leader Timberland Co. Sales climbed 80% last year to $405 million, more than twice as much Nike, No. 2 in the category.

But the trade knows a different Timberland, one that is late in delivering product, whose distribution is too diffuse, whose management gambled on a prolonged boom and now has the bloated inventory and shrinking profit margin to prove it lost.

Earlier this month, Timberland agency BBDO Worldwide, New York, resigned the account when the company slashed its $20 million ad budget to $8 million. That same week, Don Maurer resigned as Timberland's senior VP-global marketing. There are no immediate plans to replace him or BBDO.

Instead, the marketer will offer premium gifts with purchase or simply match retailers' Timberland advertising with newspaper ads. The Ryan Partnership, Westport, Conn., is working on these co-op programs.

Rivals are already cutting back on stock-keeping units and retailers like Foot Locker are more reluctant to test new products.

Still, some will finish the year strong. Wolverine World Wide's eponymous brand is the hot one among serious outdoor enthusiasts. Sales reached $102 million last year, up 26% from '93.

But it's Nike, a mere cub in these woods four years ago, that's shaking up the industry. Nike reached $149 million in sales last year, up 30% from '93, on the strength of innovations like the Air Mada, which crosses a boot with lightweight athletic footwear. Nike supports its ACG outdoor brand with aggressive TV and print advertising from Wieden & Kennedy, Portland, Ore.; its $15 million to $20 million ACG budget is twice that of most competitors.

"When we stopped trying to be what we weren't and began looking at outdoor from the Nike point of view-activity, athleticism, the `Just do it' spirit-we hit our stride," said Joe McCarthy, Nike's worldwide ad director.

Rockport Co. recorded its best third quarter ever-more than $100 million in sales-on the strength of "rugged walking." Its "Proof" campaign from Leo Burnett USA, Chicago, features testimonials from consumers.

Hi-Tec Sports, which saw sales slip to $67.5 million in '94, down 6.3% from '93, is using clever visual humor to re-connect with consumers and the trade in recent ads from Mandelbaum Mooney Ashley, San Francisco.

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