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Since 1st March, 1999
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Sports goods get old-fashioned

Herzogenaurauch, Germany, March 12 (Reuters): A red T-shirt emblazoned with the logo of the 1962 Russian World Cup team, a pair of trainers cut from worn denim, a pair of suede plimsolls designed in the 1970s.

A stock list from a second-hand shop' No, it’s the latest catalogue from German sporting goods makers Puma and Adidas, which have discovered that when it comes to retro styles, people are buying like there’s no tomorrow.

With more than 80 years of design history behind them, the two firms are using the trend towards so-called “old school” shoes to quietly lure shoe shoppers away from the world’s number one sports shoe firm Nike.

Across Europe, Asia and the US, the market in retro fashions is booming, helping sports shoe makers defy the tough trading environment.

With the top 15 companies generating global footwear sales of more than $16 billion, there are rich pickings for companies managing to cut a slice of the growing segment for old school styles.

At the vanguard of the trend is Puma, which has undergone a major image revamp since the late 1980s and early 90’s, when it clocked up an eight-year stint of losses as school kids shunned its shoes as uncool.

Partly thanks to the retro trend, the firm has bounced back with a vengeance and its sales have exploded in recent years, rising by over 50 per cent in 2002.

In the US, the world’s biggest footwear market, Puma has managed to sneak customers away from market leader Nike, analysts say.

“The brand has been adopted almost simultaneously by both suburban Caucasian kids as well as inner city kids, who basically view it as the leading edge fashion product right now,” said John Shanley, a US-based analyst at Wells Fargo Securities.

Antonio Bretone, Puma’s Global director of brand, partly attributes the success of the old-school niche to a growing preference for simple designs over hi-tech shoes and gimmicks.

“This has been brewing since 1995. People had had enough of all the technical-looking shoes with bells and whistles,” he said.

Price also plays a part in the triumph of old-school styles.

Costing around 100 euros, retro shoes are much cheaper than their performance-oriented counterparts which can cost 160 euros and above, a difference which is all important to price-sensitive shoppers in a sluggish economic climate, analysts say.

The firm known by a leaping puma motif now makes around 65 per cent of its sales in what it calls the “sports-lifestyle” market, retail analysts at Morgan Stanley estimate.

Locked in a tooth-and-nail battle for the competitive footwear market, its peers are also trying to take their shoes beyond the playing field and into night clubs.

Adidas, for instance, has seen robust growth from its trendy Sport Heritage division which includes remakes of its old shoe models like the Chile 62, a street-wear remake of a football boot first created for the 1962 World Cup.

In 2002, Sport Heritage sales jumped by 22 per cent to 904 million euros, generating almost four times faster growth than its total sales.

With a reputation as a technical innovator, responsible for tricks like pumping air into soles or using columns of foam for cushioning, even US giant Nike is jumping on the retro bandwagon.

The nostalgia-inspired shoe is one of Nike’s tactics to halt a sales decline in its home market where penny-pinching shoppers are increasingly opting for trendy shoes from smaller rivals like Adidas, Puma and Reebok.

“In their last conference call, for the first time I can remember ever, Nike made reference to the fact that they have classic footwear,” said Wells Fargo Securities’ Shanley said.

Nike’s US revenues fell eight per cent in the three months to November and the firm said it is now doing more business outside the US for the first time in its history.

But analysts warn that old-school styles, like all fickle fashions, expose the shoe makers to new sources of competition on the high street. Worse still, they warn that the fashion will sooner or later run out of steam.

“Imagine if they are left with a load of out-of-date shoes which are not sporty nor fashionable,” one analyst said. “That is the kind of scenario that would inflict serious damage to brand and reputation.” That danger leaves sports firms on both sides of the Atlantic looking into their crystal balls. Even Bretone, Puma’s director of brand, admits that the old-school bubble will burst sooner or later.

“Retro-inspired goods have a shorter shelf life and they will soon be replaced by the next scene and that could be anything, maybe shiny metallic sneakers. Who knows'”

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