Co-branded Nike-Finish Line store targets runners

Reuters

May 06, 2008

• Original Reuters article: Co-branded Nike-Finish Line store targets runners 

By David Schwartz

CHANDLER, Arizona (Reuters) - A new co-branded store by Nike Inc and Finish Line, the No. 2 U.S. athletic shoe retailer, opens on Wednesday, aimed at gaining a foothold in the niche market of runners and athletes in training.

For Nike, the world's largest maker of athletic shoes and clothing, the venture is the second in a series of co-branded "concept" stores designed to raise its profile among target groups while helping to boost sales through its retail chain customers.

"This is another way we look at expanding the marketplace, going deeper into the consumer types as opposed to trying to be a little bit of everything to everyone and in the end not being enough of anything for anybody," Nike Brand President Charlie Denson told Reuters before a tour of the 4,500-square foot store outside Phoenix on Tuesday.

The store, Finish Line Ltd, is located in an upscale mall and mainly targets high-school athletes aged around 17, with products from various manufacturers. Nike helped pay for its design and fixtures. Finish Line will operate it.

The venture comes on the heels of Nike's basketball-based House of Hoops store run by Foot Locker, the leading U.S. athletic footwear retail chain. The outlet opened in the Harlem section of New York City in November.

Denson has suggested that a new retail venture focused on soccer is soon to debut.

Both Finish Line and Foot Locker have struggled for over a year with sluggish sales at their mall-based stores. Even before the U.S. economy weakened, consumers were shying away from athletic shoe purchases in favor of electronics, analysts said.

But Nike claims it is continuing to take market share from U.S. rivals even as it controls its inventory to counter weak sales. Adidas, the German sportswear maker that is Nike's main rival, said on Monday that revenues in North America fell 7 percent on a currency-neutral basis in its first quarter, compared with Nike's 5 percent increase in quarterly U.S. revenue.

Finish Line Ltd is divided into three sections -- running, training and sports culture (geared to those who just want to look like athletes). Interactive features include the ability to customize T-shirts, or to access running routes and training advice.

Finish Line Chief Executive Alan Cohen told Reuters the company will monitor the store's performance through the Christmas season and then determine whether it should be expanded.

Nike wants to increase its direct-to-consumer sales to 15 percent of total sales from 12 percent over the next 2-1/2 years, with help from the planned opening of 100 new stores worldwide in premium shopping areas.

The two companies have partnered before. Most recently they teamed up during last year's back-to-school season in a marketing campaign to sell Nike+ running shoes, which allow data such as distance and speed to be transferred from the runner's shoes to an Apple Inc iPod.

(Written by Alexandria Sage, editing by Richard Chang)

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