Leading Producers and Manufacturers of Sports Shoes

Nike, Inc. Based in Beaverton, Oregon, Nike designs, markets, and distributes athletic shoes, clothing, and equipment. Nike reported $16.3 billion in worldwide revenue for the year ending May 31, 2007. Bill Bowerman (1911-1999), a University of Oregon coach, and Phil Knight, a University of Oregon accounting student and a middle-distance runner under Bowerman, each chipped in $500 in 1964 to start importing low-priced, high-tech athletic shoes from Japan.

From the beginning their goal was, in part, to dislodge the German domination of Adidas in the U.S. athletic shoe market. By 1971 Bowerman invented a new shoe based on treads inspired by his wife's waffle iron. The waffle trainer became a bestseller and in 1971 the two founders took the name Nike, the goddess of victory, and adopted the swoosh logo. The Nike 1980 initial public offering involved 2.4 million shares at $11 each. After several splits, the stock traded at approximately $55 in August 2007. Nike's 1982 success with Air Force 1s precedes its 1985 launch of the Air Jordan, endorsed by celebrity athlete Michael Jordan of the Chicago Bulls basketball team. Jordan signed a five-year contract in 1984 for $2.5 million to represent the first marquee basketball shoe. Close to twenty-five years later Air Jordan's remain hip; forty-four Air Jordan models are available at prices of $175 and less. In 1994 Nike entered the soccer market, an area historically dominated by Adidas. Ten years later its share of the European soccer shoe market was 35 percent, exceeding Adidas' 31 percent for the first time. To gain market share in Europe, Nike built on its celebrity athletic shoe marketing savvy. It paid the prestigious Manchester United soccer club in the United Kingdom $450 million over 14 years to outfit its players and to run its merchandising operation.

Nike began a series of acquisitions in 1988 by buying Cole Haan, the manufacturer of upscale shoes for $880 million. At the height of the inline skating fad in 1995, Nike paid $409 million for Bauer, the maker of ice and in-line skates. Some say Nike overpaid for Bauer since the in-line fad quickly faded. Seven years later it bought Hurley International, a surfing and skateboarding clothing company, for $95 million. It acquired Exeter Brands Group LLC in 2004 for $43 million, which makes value-priced footwear and apparel.

Nike's most successful acquisition was Converse in 2003 for $305 million. Converse has renovated its 60,000 square foot corporate headquarters in North Andover, Massachusetts, where it designs authentic presentations of the classic Chuck Taylor All Star. In 2006 Converse issued hundreds of variations on its moderately priced Chucks. Nike founder, Knight, is chairman of the board, the largest shareholder, and chief executive officer. He has a net worth of $7.3 billion and is the world's seventiethrichest person according to Forbes. Knight gave the University of Oregon $100 million in August 2007 to create the Oregon Athletics Legacy Fund. Knight sold nearly $50 million of his stake in Nike since August 2007 but remains the majority shareholder, owning 93 percent of outstanding Class A shares as of May 31, 2007. Fortune recognized Nike in 2006 and 2007 for employee benefits like paid sabbaticals, on-site fitness centers and childcare facilities, and its 50 percent discounts on company products.

Adidas North America, Inc. Until 2003 Adidas was the top European athletic shoe maker. It sold the top-ranked shoe for the top sport: soccer-known outside the United States as football. Following its $3.7 billion acquisition of Reebok in 2006, Adidas had a 28 percent share of the world sporting goods market, not far behind Nike's 31 percent. Adidas and Reebok together make a worldwide sporting goods industry powerhouse. Reebok headquarters are in Canton, Massachusetts, near Boston. Adidas AG, based in Herzogenaurach, Germany, has its North American headquarters in Portland, Oregon. Adidas made its name in soccer shoes. In the 1920s Adolph Dassler, a shoemaker in Herzogenaurach, Germany, decided to concentrate on athletic shoes and founded a business with his brother Rudolph. In 1936 Jesse Owens wore Adidas when he won four Olympic gold medals in track and field in Berlin, Germany. The brothers later formed separate companies. Adolph formed Adidas named after himself-Adi from Adolf and Das from Dassler-and Rudolph formed Puma in 1956, also headquartered in Herzogenaurach. Adidas made its name in soccer, with its famous three stripes logo developing from three support leather bands used to bolster the sides of soccer shoes. Adidas remains since 1954 the German soccer federation's official supplier beyond 2010. In 1974 the Adidas-wearing German team won the World Cup.

After Adi Dassler died in the 1980s his wife and kids took over the company. By the 1990s new management started to move from a manufacturing to a marketing focus. The company went public in 1995. By 1996 Adidas-with its famous three stripes logo-equipped 6,000 Olympic athletes from thirty-three countries. Adidas acquired Salomon Group with brands Salomon, TaylorMade, Mavic, and Bonfire in 1997. Salomon in-line skates helps to explain the acquisition, but the fad had already begun to fade. The new company went by the name Adidas-Salomon AG but the deal lasted only 6 years. By 2005 Adidas sold Salomon Group, retaining only TaylorMade Golf Company Inc., to return to its core athletic shoes and apparel market. In 2006 it reverted to the legal name Adidas AG.