Popular 90s Sneaker Brands Re-Enter Crowded U.S. Basketball Vertical

by 12 months ago

This Weeks Best New Sneaker Releases

Puma

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Popular 90s Sneaker Brands Re-Enter Crowded U.S. Basketball Vertical

Performance shoe styles remain out of favor, but that hasn’t prevented a host of companies from re-entering a declining U.S. basketball market in 2018. Back in March, Puma announced its return after a 17-year hiatus and both New Balance and Fila have since expressed their intent to compete with Nike, Adidas and Under Armour in the now crowded vertical.

On Tuesday, New Balance announced its re-entry into the performance basketball market by hiring Darius Bazley (a promising H.S. prospect), to serve as a million-dollar intern (deal worth up to $14 million with performance incentives); in addition to spending January-March ’19 in Boston at NB headquarters, Bazley will wear the company’s basketball shoes upon his arrival to the NBA.

Then on Wednesday, Fila announced it had inked ’18 Basketball Hall of Fame inductee Grant Hill to a lifetime contract (first signed with co. in ’94). The company plans to grow its retro footwear business, but unlike Puma and New Balance, is not expected to release new performance basketball sneakers.

The brash 90s brand And1 has also made headlines in ’18, re-signing Kevin Garnett to the label (first signed in ’03)  and announcing the Nov. 3rd re-release of its popular TaiChi model; the sneaker made famous by Vince Carter in the ’01 dunk contest.

Howie Long-Short: Fila’s ’94 signing of Hill paid immediate dividends. Fila (KRX: 081660) sold 1.5 million pairs of the GH1, Hill’s debut sneaker; the most any retailer had sold for a player’s first signature shoe since the release of the AJ1. Of course, Hill was just the 4th NBA player to receive a signature shoe in their rookie season; Hakeem Olajuwan (’84, Etonic Akeem The Dream) and Shaquille O’Neal (’92, Reebok Shaq Attaq) were the others.

Fila’s ’95 release of the GH2 was even more successful. The company sold $135 million (10% of total footwear revenue) worth of the Hill signature sneaker (more than they did of the GH1). By ’96, Fila had overtaken both Adidas and Reebok (trailing only Nike) in the U.S. basketball shoe sales.

It’s curious to see new entrants in the space considering retro basketball is in decline, basketball is out of fashion and the basketball shoe market is down -13% from its ’15 peak ($1.3 billion). NPD Group reported a “low-teen drop” in basketball sneaker sales during the month of August (last report issued) and Retail Analyst Matt Powell expected a similar result in September, saying “too much performance product forced on the market will weigh on results”; apparently, even more is on the way.

Fan Marino: After 17 years out of the game, Puma (PMMAF) decided to re-enter the performance basketball space in time for the ’18-’19 season. The company made headlines with the splashy signings of DeMarcus Cousins (Warriors), Terry Rozier (Celtics) and Marvin Bagley III (Kings), but their first retail release (a modernized version of the Clyde Court Disrupt) is off to a rocky start on the hardwood; high profile endorsees Kevin Knox (Knicks) and DeAndre Ayton (Suns) both sprained ankles in the shoe last weekend.

Earlier this week, we noted that the NBA was offering elite H.S. basketball prospects a new “professional path”; a six-figure payday (among other benefits) to forego collegiate basketball and play a single season in the G-League. We explained that players projected to be selected in the top 24 selections of the NBA draft would be better off sitting out the season than taking a step up in competition; falling a single slot in the draft would cost the player more (over the first 2 years of their deal) than they’d receive for playing the entire season.

The G-League’s new path isn’t going to hurt NCAA basketball, but the Bazley model could (at least until the CBA is renegotiated and players can enter the draft directly from H.S. in June ‘23); if the NBA’s next class of stars (and their agents) can find companies willing to pay them 7 figures not to play, it’ll wipe out the top talent within the college ranks. Don’t believe me? 9 of the top 10 players selected in the ’18 NBA draft were freshman (Mikal Bridges was the exception) last season.

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JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.

While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.

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