Wednesday, July 11, 2007

Sneaking Sneakers

Sneakers have become a multi-million industry worldwide. In 2004 alone, Americans spent $16 billion on sneakers, 28% of which is for sneakers made for running, while 23% is for basketball. Somehow, it has become a status symbol and a fashion statement.

The word "sneaker" comes from the shoe's rubber sole, which allows wearers to "sneak" around noiselessly. In 1862, a book titled "Female Life In Prison" said that prisoners referred to the rubber-soled shoes worn by a correction officer as "sneaks." Several years later, the use of "sneaks" to refer to rubber-soled shoes gained wide acceptance and in 1873 store ads started referring to these shoes by the name "sneaker".

The best selling sneaker of all time is the Converse All Stars. Introduced in 1917, the All Star was the first sneaker designed for basketball and an estimated 580 million pairs of the sneaker have been sold to date.

Nike, the current sneaker company giant, started in 1964 by Phil Knight, a former University of Oregon runner and CPA, and Bill Bowerman, the track coach at Oregon, who made running shoes in his garage on the side. Nike's original name was "Blue Ribbon Sports", and changed name only in 1972, after much deliberation against another proposed name "Dimension 6". In 1964, Nike's sales revenue was $8,000. By 2003, it has rose to $12.3 billion.

Somehow, Nike had been blessed with a series of good fortune that helped to propel its business. First it was the amazingly simple but effective "Swoosh" logo. In 1971, Carolyn Davidson, a graphic design student at Portland State University, was approached by Nike founder Phil Knight and asked to design a logo. When Davidson presented the swoosh design to Knight, his response was, "Well, I don't love it but it'll grow on me". Davidson received $35 for her services. In 1982, 11 years later, Nike issued some stocks to Davidson as a measure of the company's appreciation.

And of course, Nike's success can be hugely attributed to Michael Jordan. In 1984, Jordan, who was only beginning his career in basketball signed an endorsement contract with Nike. At that time, Nike was almost an unheard brand and Jordan who was a big fan of Adidas wanted to sign a deal with them. Jordan selected Nike only because Adidas did not come to his terms. In 1985, Nike released MJ's signature shoe, the Air Jordan. Originally, the NBA banned this new shoe because it didn't match the league's dress code, but the ban only gave publicity to the shoe and became even more in-demand with the youths of that generation. Nike revenues reached $1 billion for the first time in 1986 and the rest, as they say, is history.

Air Jordans continue to be one of the most popular sneakers and was mainly responsible for at least 3 riots:
  • On March 3, 2001, after 400 customers waiting to purchase the new Air Jordan Retro 11s broke the security gate of a sneaker store in Alexandria, Louisiana, police were called in and used pepper spray to disperse the crowd. "It was like an animal attacking a bloody piece of meat," one customer said.
  • In a separate incident in Sacramento, California also on March 3, 2001, 60 police officers in riot gear were called in to quell disturbances by 200 customers fighting for 80 pairs of Jordan Retro 11s in a local mall.
  • And on Feb. 14, 2004, Charlotte police were called in to a shopping mall after 200 people waiting to purchase the new Jordan Retro 12 sneakers started pushing and fighting, resulting in one injury and one arrest.
Following Nike's success, sneaker companies are now careful not to miss the boat on signing athletes and celebrities for endorsement that could potentially be a big boon for advertising. Reebok, for example, signed Allen Iverson to a lifetime contract on November 28, 2001. Iverson, a talented and popular NBA player, but often in trouble with law, gets a reported $7 million a year from the company. Reebok also almost signed LeBron James to a $75 million-dollar contract, until Nike snatched him up for $90 millions.

And in 2003, Reebok signed a 3-year-old basketball prodigy named Mark Walker after seeing a video of the kid filmed by his parents making 18 consecutive free throws on an 8-foot hoop. In a press release Reebok referred to Walker as "short of everything but talent."

Random Odds & Ends
  • The Air Force 1 debuted in 1982 and was the first basketball shoe to make use of air technology.
  • The largest sneakers in NBA history is Shaquille O'Neal's size 23, followed by Will Perdue's size 22-4A.
  • Jerry Seinfeld owns over 500 pairs of mint condition white sneakers.
  • Nike make sure to release new Jordans on Saturdays so that kids won't skip school to get them.
  • K-Swiss's five-stripes has a purpose other than design: it helps prevent stretching.

1 comment:

JaniceNW said...

Ny baseball boy(BBB) 16yo is a sneaker whore. He has 7 pairs! It's all about matching his track jackets! LOL. At least he finds them on sale and doesn't pay full price.