When British born Joseph William Foster invented a spiked running shoe in 1894, it gained enough popularity among his fellow runners to inspire the formation of his own company, JW Foster and Sons. In 1958, Foster's grandsons created a companion company, Reebok (named for the speedy African gazelle), which eventually absorbed JW Foster and Sons. Reebok was a little-known British shoe company when, in 1979, sporting goods distributor Paul B. Fireman spotted its shoes at a Chicago trade show. Fireman acquired an exclusive license to distribute Reebok in North America, and subsequently financed Reebok USA.

Reebok leaps onto the American scene

Reebok USA received worldwide acclaim after the 1982 introduction of its Freestyle shoe, an oxford-style women's sneaker designed for newly popular aerobic exercise. The Freestyle became the most successful athletic shoe of all time. Reebok became the darling of aerobic aficionados everywhere and is a trademark of yuppie 1980s style. In 1985, three years following Freestyle success, Reebok USA acquired British Reebok. Sales went from $3.5 million in 1982 to $919 million in 1986, the same year that Reebok supplied apparel to more than 3,100 Olympic athletes in Atlanta. In 1987, Reebok surpassed Nike's market share, and was the leading U.S. Sportswear company for a few precious months. Although Nike quickly reclaimed the first-place spot, Reebok has been its closest competetitor ever since.

Despite this business success, Reebok has like many of its competitors struggled with the complicated business of making cost-efficient product without compromising or offending moral and cultural standards. The failure of Reebok to divest from South Africa in the 1980s inspired criticism and boycotts. In response, Reebok entered the 1990s with an aggressive human rights agenda. The company established a Human Rights Award, presented to prominent civil rights activists every year.

Reebok refocuses

Industrywide, U.S. athletic footwear sales were $13.8 billion in 1998, a 6.3 percent drop from 1997. Reebok has been hurt by the industry's problems, losing $7.1 million in 1998 net income operations. However, some analysts think Reebok's biggest problems are specific to the company. They expect a drop in Reebok's 1999 market share, but predict rises in the market for Nike, New Balance and Adidas. Reebok has responded by laying off about 500 out of its 5,000 employees, at least 100 of whom worked at Reebok headquarters. CEO Paul Fireman has also reacted to the slump by declining his earned 1998 bonus, and by appointing two marketing legends, Angel Martinez and Carl Yankowski, to run Reebok Unlimited. Martinez created Reebok's aerobic shoe in the 1980s and, as chief executive of Rockport, he increased the subsidiary's sales by selling its shoes as 'more than just comfortable,' gained a new popularity with the youth market. Teamed up with Yankowski, Sony's former COO, Martinez is an essenial aid to Fireman's plan to "reclaim [Reebok's] roots and refocus the business."

DMX what?

In 1997, Reebok received little public notice with the introduction of its DMX shoe technology, designed to increase air flow to cushion and stabilize the feet. Tennis sensation Venus Williams and NBA's Allen Iverson are endorsing Reebok's 1999 DMX campaigns. Despite these high-flying spokespeople, Reebok is not necessarily targeting a high-end market. In April 1999 the company launched new ads for DMX shoe-cushioning technology. Advertised by Reebok as the VW Beetle of sneaker, DMX shoes are promoted as unattractive but functional. Appropriately, the newest advertising campaign for DMX (as well as a turn for Reebok in general) focuses more on what people feel when they wear the shoe than on how fashionable it may be.

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