In early 1983, the athletic footwear market was maturing. Price competition was becoming
more severe, both among the branded companies and from unbranded sources at the low end of the
market, and it was unclear where future directions for growth lay. A slowing of market growth was
widely assumed. “For the first time,” a leading consultant reported, “there is more product out there
than demand for it.” Similarly, the president of one athletic footwear company stated: “The world
has changed dramatically in the last four or five months. We think we’re seeing a major shift from a
seller’s market to a buyer’s market.” It was also anticipated that retailers would gain power, at the
expense of suppliers, and that real innovation would command a greater price premium.
Looking to the future, observers believed that the nation’s concern for physical fitness was an
important and enduring trend. “Although the big increases in participation won’t be there,” one
analyst summarized, “Americans are not going to stop exercising—and almost all athletic activity
requires shoes.” Observers expected growth of 6% to 8% in this participation-based segment of the
market through the 1980s and a need for continued innovation in both footwear and apparel.