A longer way back is K-Swiss. Even with its strong recent showing, it holds a mere 1.1% of the sports shoe market.
Still, the company hopes to join the ranks of the fast-growing challengers to Nike and Reebok, notably L.A. Gear and British Knights, a popular shoe among inner city youths.
Stresses Simplicity
Nichols plans get there by keeping it simple. No need to make thousands of styles and colors, which often leaves stores stuck with shoes they can't sell. K-Swiss uses simple styles that are made using only three pieces of leather per shoe so there are fewer seams.
"We come out with one model a season. We don't have to do it with fluff," Nichols said.
Horan, the newsletter publisher, sees simplicity as one of K-Swiss' strengths. Consumers are being bombarded by ads for high-tech shoes with high prices that use various air cushions or, as a Reebok ad claims, "energy return" during exercise.
"After a while, consumers and retailers start to glaze over it. You're not selling the space shuttle here. It's just sneakers," Horan said.
Nichols' simple approach says something about his personal style. He's not a fashion expert or flamboyant marketing whiz, but a veteran shoe dog who started in the business working in his grandfather's store in Brooklyn and ultimately operated his own chain of children's shoe stores.
Nichols, 45, was lured away from his stores by Stride Rite, a children's shoe maker based in Cambridge, Mass. He left when he bought K-Swiss from the Bruners, who founded the company in 1968 to import Swiss-made sporting goods and started manufacturing shoes in 1972.
At K-Swiss, Nichols is borrowing some of the same approaches to manufacturing that companies such as Reebok, Nike and L.A. Gear have used successfully. One is to have a distinctive logo on its shoe that also serves as a trademark. Reebok has a Union Jack, while Nike has a swirl that looks like a comet. For K-Swiss, the look is five stripes (as opposed to three for European giant Adidas) and a red, white and blue shield.
Uses Foreign Plants
Another important move Nichols has made is to hook up with low-cost shoe manufacturers in Asia that can make the shoes quickly using leather from Argentina. The company makes some of its shoes in Pacoima, but that is quickly changing.
As big as they are, Reebok and Nike don't own factories. They are essentially marketing companies that design shoes made under contract by manufacturers in Korea, Taiwan and other Far East countries.
Companies such as Reebok and Nike don't cut and dye leather and don't have a huge manufacturing force to support. They can act quickly because their decisions about dropping or creating a new shoe do not have to be made based on how best to use aging factories.
So what do they have?
"They have a telephone," Nichols said. "And on the other end is Korea or Taiwan."
Nichols' most recent introductions have been a children's line, boating shoes and a line of clothes. The company is putting a lot of effort toward selling teen-agers on its shoes, particularly at youth tennis tournaments.
Horan said that K-Swiss is close to breaking away from the also-rans and joining the second-tier of companies under Nike and Reebok. But to become a huge seller, he said, it will have to do a couple of things.
Needs Partner
One, he said, is to hook up with a company with deep pockets that can act fast. Nike had a Japanese trading company that backed it, while Reebok had a British firm. He said the market moves too fast for banks and other conservative lenders.
Another thing K-Swiss needs, he said, is to find the kind of identity that made the other major companies in the sneakers business so successful. Nike was the shoe for joggers, Reebok rode the aerobics craze and L.A. Gear built itself by selling fashionable shoes worn with jeans and other casual clothing.
If K-Swiss can find that sort of identity, he said, the company may soon be among the top sports shoe companies in the nation.
Davis said the company will continue to push simplicity. He believes that retailers are growing tired of having to pick from among thousands of styles and colors.
"They have to guess every six months what is going to be hot and what is not. If they miss, they will have a lot of shoes that will have to be marked down. We believe in keeping everything as simple as possible," he said.
