Nike, Shmike Little-known Skechers enters the sneaker wars

February 22, 1999

Following a sluggish year for sales, the mood last weekend at
the Super Show in Atlanta, the sports industry's behemoth annual
convention cum swap meet, was somewhere between hopeful and
wildly uncertain. This was particularly true among attendees
from the athletic-footwear business, which has been racked by
the NBA lockout, the retirement of Michael Jordan, a trend
toward "brown" (i.e., hiking) shoes and a dearth of innovations
by the industry's bellwether, Nike. Last year, sales of athletic
footwear in the U.S. dropped by 8%.

Against this backdrop it seemed fitting that a fledgling Los
Angeles-based shoe company--one that has zero professional
athletes under contract and is best known for its trendy work
boots and women's sneakers--stole the Show. The roughly 100,000
wholesalers, retailers and industry reps who converged on the
Georgia World Congress Center could hardly pace from one display
to another without seeing some reference to Skechers USA. "I had
barely heard of Skechers," said Randy Miller, a sports marketer
from Chandler, Ariz. "You'd think they were bigger than Nike."

For a weekend, anyway. Skechers took over the prized
54,000-square-foot Grand Ballroom, which became available when
Nike, claiming its needs were no longer being met by the Super
Show, stayed home. Skechers spent $7 million to assemble a
30-foot-tall transparent wall displaying tens of thousands of
shoes illuminated by pulsating lasers. All around the Super
Show, scores of models shod in Skechers distributed invitations
to a "multi-media experience" at the company's exhibit space
that included aerobic dancing by 60 fog-enshrouded dancers. Even
the backs of some Atlanta taxi receipts were emblazoned with the
Skechers logo. It all added up to a bold, percussive step for a
privately held company that did only about $400 million in
worldwide sales last year. (That was a 100% increase from 1997
but nothing like the $9.6 billion that Nike generated.)

Skechers president Michael Greenberg relished his role as the
Admiral Stockdale--Who am I? Why am I here?--of the Super Show.
"Look, 85 percent of the people who wear athletic shoes wear
them not for sports but as a casual shoe," he said. Skechers's
sneakers are, in fact, inspired by athletic shoes but not meant
to be used as such. "We're a style company, and we want
consumers to buy all their footwear from us."

Still, can a newcomer that unapologetically puts edginess and
fashion ahead of performance significantly cut into the market
share of Nike or another Super Show absentee, Reebok? "They're
great at coming up with creative ways to promote the brand, and
they do fashion shoes well," John Horan, publisher of the
newsletter Sporting Goods Intelligence, says of Skechers. "But I
don't see the [companies] with strong performance-shoe heritages
changing their business because of this trend."

Nevertheless Skechers's presence in Atlanta served notice that
at least some degree of change in the industry is already afoot.

Skechers was the Admiral Stockdale--Who am I? Why am I here?--of
the Super Show.

HOLE YARDS PAR R1 R2 R3 R4
OUT
HOLE YARDS PAR R1 R2 R3 R4
IN
Eagle (-2)
Birdie (-1)
Bogey (+1)
Double Bogey (+2)