Nike launches $200 Air Jordan shoe
Friday, February 1st 2002, 12:00 am
By: News On 6
BEAVERTON, Ore. (AP) _ Air Jordan, the most successful brand of Nike basketball shoes, is taking a vertical leap with a price of $200 a pair.
Packed in a metallic silver briefcase instead of a shoebox, the Air Jordan XVII arrives in stories next weekend, accompanied by a $10 million national advertising campaign with TV spots orchestrated by filmmaker and well-known basketball fan Spike Lee.
The competition, meanwhile, is trying to keep up. Reebok International is taking a similar approach with a $125 shoe promoted by Philadelphia 76ers guard Allen Iverson and singer R.Kelly, among other sports and entertainment stars.
Analysts say high-priced shoes are mostly a gimmick to get customers into the stores, where they'll buy other Nike products. But the Beaverton-based athletic shoe and clothing maker has come up with a well-designed and neatly packaged gimmick.
Still, don't start looking for these pricey shoes on basketball courts.
``Most of them will never see the street,'' said John Shanley of Wells Fargo Securities in New York. ``Kids call it a 'keeper.' They basically keep it under their bed and when friends come over, show it to them.''
Tyson Frodsham, a high school sophomore who lives near Nike headquarters, agreed.
``I'd probably hang them on a mantle or on my wall or something,'' he said.
Ever since Michael Jordan teamed up with Nike during the 1984-85 season, the premium shoe has routinely sold out when a new version is introduced. In fact, Nike moved the launch day to Saturdays by 1998 because of complaints that kids would skip school to line up for the latest version when they found out it was about to hit the stores.
Next Saturday, Feb. 9, the 17th model of the top-of-the-line Air Jordan will go on sale just in time for the NBA All-Star game, two weeks after the Nike ad campaign began during the NFL playoffs.
Reebok, meanwhile, is trying to create its own buzz for its $125 shoe, the Answer V _ the ``V'' is for version 5 _ with a TV advertising campaign that began Jan. 22. It features basketball, football and tennis stars alongside rapper Jadakiss and R&B singer Kelly, who laces up a pair of Iverson's shoes in the campaign's 30-second premier ad.
``The key passions in a young man's life are music, technology, sports and entertainment,'' said Denise Kaigler, Reebok spokeswoman. ``It's a marketing mix that is working.''
Analysts say the marketing battle has intensified because U.S. athletic sales have been pretty much flat the past few years. Nike, with roughly $10 billion in annual sales, and Reebok, with about $3 billion, are fighting for the same teen boys and young men who are virtually the entire market for basketball shoes.
``Basketball has the highest margin, the highest-priced shoe, and the basketball market is up strong, maybe 20 percent this year,'' said analyst Virginia Genereux of Merrill Lynch in New York.
Nike had the high end of that market ``almost entirely to itself'' since Air Jordan was introduced, while Reebok ``has not done nearly as well appealing to young men,'' Genereux said.
She noted that Reebok has a much bigger female customer base, historically about 50 percent, compared with less than 30 percent for Nike _ but the new Reebok ad campaign to match Nike and promote Iverson as the superstar to replace Jordan shows Reebok is intently seeking the boys' market.
``I think Reebok has said we're going after Nike in a way they haven't done before,'' Genereux said.