Reebok was meant to be a ‘Nike killer.’ How the brand lost its No. 1 spot

Retail Dive


In the ’80s, Reebok was the top sports brand for a time. Now it’s dwarfed by Nike and Adidas. We take a look at the history of the brand, through the lens of the people who were there.

Want to listen to this story?

Click the play button or listen on Apple Podcasts, Stitcher, iHeartRadio or Spotify.

Chapter One

When Joe Foster founded Reebok with his brother Jeff in 1958, it was a small running shoe company with moderately sized ambitions: tackle the athletics market and break into the U.S.

By the time Foster retired from Reebok in 1989, the brand had scaled to dizzying heights. Mick Jagger had worn Reebok Freestyles in his Dancing in the Street music video with David Bowie, Jane Fonda had adopted them for aerobics, Cybill Shepherd had donned a bright orange pair at the Emmys, and Foster was rubbing elbows with the likes of Sean Connery and Frank Sinatra in Monte Carlo.

Reebok had overtaken Nike as the number one athletics brand in the mid-’80s, and in 1989 was still making more than the sportswear giant annually, with $1.82 billion in sales compared to Nike’s $1.71 billion. It was a wild success story that saw Reebok’s sales spike from $12.8 million in 1983 to $310 million in 1985, and well over one billion in 1987 and thereafter.

“How did we do that? It was amazing. I think we must have been either stupid or just something to keep going and keep pushing and not worrying about it,” Foster said of the brand’s meteoric rise. “That’s probably why I decided to get off the treadmill and retire and sit back: I’d done so much and for so long. There comes a time that you’re useful for a company and after that, other people — more corporate people, people more used to these sorts of volumes — they can move in.”

It was an electric time to be at the company. There was a palpable energy from how fast it was growing and, of course, the thrill of taking down the top dog in the space. Paul Litchfield, the former vice president of Reebok’s Advanced Concepts Group (and the developer of Reebok’s famous Pump basketball shoe), remembers it as “full of energy, full of potential, full of stress.”

“It was kind of a positive thing, you know? It was always possible. Everything was possible,” Litchfield, currently head of product at GoRuck, said in an interview.

If you didn’t grow up in the ’80s, Reebok’s one-time domination of Nike might come as a surprise. Nike in its fiscal 2020 (which ended in May last year) made over $37 billion, while Reebok made just $1.6 billion (it hasn’t made that little since 1987). Granted, 2020 also brought a pandemic, but even in the years leading up to that, Reebok was making about $2 billion. Now the brand is poised to be sold off by Adidas after a history of underperformance. A far cry from those years in the ’80s when the small British company had unseated the king of all sportswear brands.

Nike and Adidas have surged past Reebok since the ’80s Net sales, in billions, from 1985 to 2020. Sales include all sub-brands.*19851990199520002005201020152020 0 5 10 15 20 25 30 35$40AdidasNikeReebokAdidas acquires Reebok. Reebok'ssales after this point no longerreflect the sales of any other brandspreviously owned by Reebok. *Net sales for Adidas are only shown from the company's IPO in 1995 onward.

“Reebok kind of has the unfortunate case of: They’re always being viewed through the lens of their competitors,” Nicholas Smith, author of “Kicks: The Great American Story of Sneakers,” said in an interview. In the ’80s and ’90s, that meant the battle between Reebok and Nike. In the 2000s, it meant Reebok was seen as a subsidiary of Adidas. “There were very few chances where they really got to stand and show what they are as a brand on their own.”

It’s not just a story of Reebok’s plateauing growth and eventual decline. It’s also a story of Nike’s incredible rise. By 1997, less than ten years after Nike and Reebok were neck and neck, Nike had grown to $9.2 billion in net sales, while Reebok was stuck at a slower pace, raking in $3.64 billion. It wasn’t an insignificant amount of money: In fact, Reebok made only slightly less than Adidas that same year. But Nike had already begun to pull ahead, and it hasn’t given up its lead since.

Reebok becoming number one “kind of caught Nike completely off guard. Afterwards, Nike regrouped, they found a very well-known, at the time, basketball player named Michael Jordan. And we all know the rest of that story — how they were able just to capitalize on Jordan stardom and leap way past Reebok, leaving them behind practically forever,” Smith said. “But, you know, if you grew up in the ’80s like I did, you kind of remember just what a thing those Reebok shoes were. And how they were just seen on equal footing, no pun intended, as everyone else that was out there, which is not the case today.”

Reebok’s scrappy journey to number one took everyone by surprise, Nike especially. Its decline has been much slower, as falling sales and an owner that didn’t invest in its growth took their toll. Over the years, Reebok was reduced to a fraction of what it once was. The brand holds just 1.1% market share in the sports footwear space (a rank of 16th), according to Euromonitor International. Apparel is even worse: Reebok holds just 0.3% share, a 12th place ranking.

“I think they started looking over their shoulder a bit. And I think that then they started getting worried about things like: ‘Are these guys going to catch up?’” Litchfield said of Reebok. “And as soon as you start worrying about other things, or if you start believing the press clippings, good or bad, you tend to begin to doubt yourself. As an organization, that can be somewhat contagious — and it’s insidious. It’s not like a car accident where you drive and all of a sudden you crash. It’s like me going bald: one hair at a time.”

Why didn’t Reebok make it? They were beating Nike: How is the brand this small and inconsequential now?

It’s not a straightforward story. It’s a story about innovation, about missed opportunities and perhaps most of all, about what might have been.

Litchfield can’t talk about almost anything in his early years at Reebok without smiling. It’s as if the energy of the company culture has lived on in him over the years, buried in some corner of his heart. And it comes out in full force when he tells the brand’s stories.

Foster, too, talks about Reebok with an enthusiasm usually reserved for children on Christmas morning. Even at 86, he’s genuine in his love for the brand he founded so many years ago, which grew so much further than his initial expectations.

There are really no lukewarm feelings about Reebok. Except maybe from today’s consumer.

‘Charging in’

Long before Reebok grabbed number one market share, before Foster even began thinking about Reebok, his grandfather founded a shoe company, J.W. Foster & Sons. Founded in 1895 by the Joe Foster he gets his own name from, it became known for spiked running shoes, which were worn by British runners Harold Abrahams and Eric Liddell when they won gold at the Olympics in 1924. (Also immortalized in the film “Chariots of Fire.”)

The original J.W. Foster & Sons factory on Dean Road in Bolton, England Source: Joe Foster A Reebok shoe advertisement from the ’60s. Source: Joe Foster

Those origins would eventually give Reebok its basis in running, when Foster and his brother Jeff founded the company decades later, drawing on their experience with the family business.

During his 18-month stint of national service with the U.K.’s armed forces, Jeff Foster was stationed in Germany and gathered inspiration from Adidas and Puma to bring back to J.W. Foster. The brothers became convinced that the family business needed to change — that it was failing — but the rest of the family wouldn’t listen.

Joe and Jeff Foster working at the Dean Road factory, circa 1957 Source: Joe Foster

“We couldn’t persuade my father and uncle, who were then running the business, to even talk to each other. They didn’t talk to each other,” Foster said. “They were just doing what they’d done for so long, and we couldn’t get them to change the company.”

The result was the formation of Reebok (for a while, known as Mercury Sports Footwear). Foster and his brother knew Adidas and Puma were taking on the soccer market, so they focused on athletics, with the aim of moving into the U.S. market.

As Foster and his brother were breaking off from the family business, everything still came back to a pair of J.W. Foster shoes.

Years earlier, Foster had won a childhood race during World War II in a pair of the family shoes and was gifted a Webster’s dictionary. As an adult, he’d comb through it looking for a name for his shoe company.

“We put down a lot of names: Cougar, Falcon, anything that sounded very sporty, whether it be a bird or whether it be an animal. But I thought: ‘I’ll have a look through my dictionary’ because I like the letter R — love the letter R,” Foster said. “And I opened my Webster’s dictionary to the letter R, and it doesn’t take long thumbing through the pages to get to R-E. But it was R-E-E-B-O-K: Reebok, a small South African gazelle. Fantastic! That must be for us. And I put Reebok at the top of the list.”

Joe Foster talks through the origins of the ‘Reebok’ name

Then came the hard work: breaking into the American market. Foster first went to Chicago looking to sell shoes in 1968, but once potential distributors realized he operated out of the U.K., they backed away. It wasn’t until 1979 that he found Paul Fireman, and with him, a reliable U.S.-based distributor.

Paul Fireman is a key figure in the history of Reebok. The long-time CEO, and former owner, is widely credited with growing Reebok beyond its running shoe roots. He’s also the one that sold the company to Adidas.

But in 1979, he was just a guy running another sports and fishing tackle business who saw Reebok at a Chicago sporting goods show and thought it looked interesting.

“I kind of say, ‘Can I get involved with it?’ And they at first didn’t want to do that because they didn’t really know me, obviously,” Fireman said in an interview. “I knew that. So I just continued, and we talked, and before you know it, I had an opportunity to be a distributor in the United States with their product. To my naivety, I didn’t realize that they didn’t make much product. It was a very handmade running shoe.”

Reebok needed a new factory setup to meaningfully sell in the U.S. The facility they had at the time made just 300 or 400 shoes a week, according to Fireman — not enough to support any kind of popularity. Eventually they landed in a South Korean factory, which gave them enough top-quality product.

It was during the early months, as Fireman learned more about Reebok, that he knew he wanted in for the long-haul. In 1979, Fireman took a 95% stake in Reebok’s U.S. business, and in 1984, he bought the international company from Foster alongside investor Stephen Rubin.

“I was going to go for Reebok,” Fireman recalls. “It was within my financial budget, which was not much, and I just went charging in. I never really looked back once I started. I just went 100%.”

A five-star Runner’s World rating was the final key to unlocking the U.S. market.

Joe Foster discusses the Runner’s World rating systemJoe Foster on receiving three five-star Runner’s World ratings

Foster had his eyes firmly set on getting a five-star running shoe from the publication because he’d seen what it did for brands like Nike. Already in 1970, Ron Hill had won the Boston Marathon wearing a Reebok running shoe, but for popularity with the everyday runner, a Runner’s World five-star rating was a must.

In 1979, Reebok got three five-star shoes at once for the Inca, the Midas and the Aztec. It was the beginning of Reebok’s success in the U.S.

“That was the critical thing — because from there we could build,” Fireman said. “We just had to get enough product behind it so that we could get their attention before they fell asleep.”

Chapter Two

The rise of Reebok

Reebok’s explosion hadn’t happened yet, but it was coming, thanks to very soft leather and the aerobics trend.

The Freestyle came about thanks to Angel Martinez, initially a salesman at Reebok, who discovered one of those very large white spaces executives look for when he attended one of his wife’s exercise classes. Broadly, the opportunity was in making athletic shoes for women, who were largely being ignored by other brands. Specifically, it was in the burgeoning aerobics market.

Joe Foster talks through Reebok’s aerobics boom

“What does he see? He sees the instructor in running shoes, half the class in running shoes, the rest — no shoes,” Foster said of how Martinez found the inspiration for The Freestyle. “That was his lightbulb moment. ‘Why don’t we make these girls a special shoe with glove leather uppers and a very cushioned sole?’”

By Foster’s account, Fireman was at first uncertain about launching an aerobics shoe, since the company was doing so well in running. But once The Freestyle launched, Fireman put marketing power behind it and the shoes quickly got picked up by aerobics instructors, and the entire class followed suit.

An advertisement for the Reebok Freestyle Source: Joe Foster

Next, celebrities started donning the shoe. In 1985, the same year Reebok IPO’d, Cybill Shepherd wore a pair of Freestyles to the Emmys (relatively unheard of at the time, according to Smith) and Mick Jagger wore them in a music video.

“ I didn’t have any giant ambitions. I just had the ambition to find a business that I could get into and make it something of my own and be entrepreneurial. Paul Fireman, former CEO of Reebok

“You kind of see the brand doing everything right across the whole area. They’re doing well in sports, they’re doing well in culture, in music, so they really have their brand out there,” Smith said of the time period. “I think it’s important to remember that it used to be an ‘it’ brand. It used to be really, really big that the biggest stars were wearing it — and then now, not so much.”

The goal was never to have celebrities wearing its shoes. The goal wasn’t to build a company that was an ‘it’ brand. Not for Foster or Fireman.

“I didn’t have any giant ambitions. I just had the ambition to find a business that I could get into and make it something of my own and be entrepreneurial,” Fireman said. “If I could build it up, I would build it up to a place where I could make a good living, take a vacation once in a while. That was all my ambition was at the time.”

Once The Freestyle got Reebok going, though, the company started thinking about what other sports it could get into.

“At that time, there were two significant players: There was Nike and there was Adidas — worldwide,” Fireman said. “And I thought there was plenty of room for a third.”

Joe Foster meets with Reebok’s international distributors in the ’80s Source: Joe Foster

Four years later, after bringing down Nike as the number one athletics brand, Reebok’s next big shoe was born: The Pump.

The Pump was a basketball shoe, and according to the man who helped make it, it was terrible. Of course, it didn’t end up that way — it ended up being one of Reebok’s most famous shoes. But at first, it was terrible. Inspiration for the shoe came from an Italian tennis brand called Ellesse, which had combined the fit mechanism of a Raichle ski boot with a tennis shoe to put an inflatable system on the inside of the shoe. Reebok thought, why not use a similar idea to make a better basketball shoe?

Litchfield had been a firefighter and worked as an EMT, so he was familiar with air splints and thought something like that might work as a bladder for the shoe. He prototyped it and showed it at the Atlanta Super Show in 1989.

조회 0회