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BODY WATCH : Sizing It Up : WHY IT COSTS WHAT IT COSTS

June 13, 1995|STEVE PEARLSTEIN | THE WASHINGTON POST

The typical American owns two or three pairs of athletic shoes, which range in price from a $20 pair of old-fashioned sneakers at a discount store to $135 for top-of-the-line basketball shoes. One big seller has been Nike's Air Pegasus, which, like nearly all athletic shoes, is manufactured by suppliers in Asia. This accounting is based on a sale at an outlet of a large national retailer.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Cost to Nike:

Materials............................$9.00

Duties................................3.00

Rent, equipment.......................3.00

Production labor......................2.75

Supplier's operating profit...........1.75

Shipping...............................50

Nike Total: $20

Cost to retailer:

Nike's operating profit.............$6.25

Sales, distribution, administration..5.00

Promotion/advertising................4.00

Research/development..................25

Retailer Total: $35.50

Cost to Consumer

Personnel...........................$9.50

Rent.................................9.00

Retailer's operating profit..........9.00

Other................................7.00

Consumer Total $70

SOURCES: Nike Inc., Reebok International Inc., the Finish Line Inc., Just for Feet Inc., Melville Corp., U.S. Customs Service, Athletic Footwear Assn., industry consultants and executives.

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