Reebok gambles on 50 Cent investment

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Reebok International has shot a commercial that features hip-hop stars 50 Cent and Jay-Z, two of the hottest and most controversial artists in the music business.

The ad comes on the heels of a deal with 50 Cent to produce a signature footwear collection-just six weeks after Reebok enjoyed immense sales success with a similar shoe line for Jay-Z. With such rivals as Nike and Adidas focused heavily on sport, Reebok is hoping the addition of music to its marketing mix will give it an edge with the young, urban audience.

"This is . . . part of our strategy to align the brand with athletes, artists and events that reflect youth culture," said Micky Pant, Reebok's chief marketing officer.

The campaign for 50 Cent's shoe, called the "G-Unit Collection by Rbk," is handled by Omnicom Group's Arnell Group, and will be introduced in the fall. The spot featuring the two rappers is expected on the air early this summer, coinciding with their upcoming tour.

In addition to the deals with 50 Cent and Jay-Z-the first two non-athletes to score personal footwear deals with athletic shoe companies-the company has also signed Latin pop star Shakira and has used singer Missy Elliott in spots.

Furthermore, Reebok and Foot Locker are sponsors of the "Rock the Mic" nationwide tour, headlined by 50 Cent and Jay-Z, which starts June 25. 50 Cent is expected to wear his signature sneakers.

While archrival Nike's signing last month of basketball stars LeBron James and Carmelo Anthony cemented the swoosh's reputation for garnering top-athlete endorsers, Reebok has quietly been going for another kind of credibility-street cred.

50 Cent is the hottest rapper in the business right now. He's sold more than 5 million copies of his debut CD, "Get Rich or Die Tryin,'" which was released in February and is still on the Billboard Top Ten.

In a statement, 50 Cent (a.k.a Curtis Jackson) said: "Reebok's Rbk Collection is the real thing when it comes to connecting with street and hip-hop culture."

right for reebok?

Some question whether the Jay-Z endorsement is right for Reebok. At Rolling Stone's Youth Culture conference last week, Jameel Spencer, president of rap mogul Sean "P. Diddy" Combs' Blue Flame Marketing & Advertising, said that while Jay-Z may endorse Reebok, he wears the competition's shoes.

"Jay-Z wears Air Force Ones," Mr. Spencer said. "He loves Nike."

You can't argue with the numbers, however. Reebok's stock closed at $32.90 on June 12, up 54.8% from a low of $21.25 on Oct. 8, 2002. Sales in the $15 billion athletic footwear market are up more than 7% over the past three years, according to the Sporting Goods Manufacturers Association, which also predicts another modest gain this year. Nike has seen the same kind of bump in its stock, up 43% to $55.30 on June 12, from a low of $38.53 on Oct. 10.

And if Reebok can't beat Nike in signing top athletes, it's claiming victories on smaller fronts. By partnering with Foot Locker in sponsoring the 50 Cent/Jay-Z tour, Reebok is taking advantage of a rift between Nike and the country's No. 1 athletic footwear retailer. Earlier this year, Foot Locker cut its inventory of some of Nike's premiere shoes; Nike in turn moved several hundred million dollars in business to other chains.

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