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L.A. GEAR ACQUIRES WOMEN'S ATHLETIC SHOE MAKER
Published January 31, 1995
L.A. Gear announced it has agreed to acquire Ryka Inc., a small "but admired" maker of women's performance athletic shoes - - a deal valued at more than $16M. For L.A. Gear, "once a high- flying performer in athletic shoes but now plagued by losses, the acquisition would represent an effort to expand its product lines and enter new niche markets." Ryka may be better known for its founder and CEO Sheri Poe, who has used the company as a platform to educate women about violence and abuse. Poe began the Ryka Rose Foundation and pledged $10,000 a quarter to aid victims of violence and abuse. Ryka will remain an independent brand, and L.A. Gear has pledged full support of the Rose Foundation. Ryka had just under $15M in sales in '93 and has yet to show a profit in its 10 years of existence. Poe will remain president of Ryka and is expected to become a L.A. Gear director (Glenn Rifkin, N.Y. TIMES, 1/31). L.A. Gear CEO Stanley Gold: "The footwear industry is beginning a consolidation phase" (USA TODAY, 1/31). '95 FOOTWEAR OFFENSIVE: Athletic footwear companies "are back on the offensive" in 1995, with "revamped" marketing strategies, new designs and technologies, and "aggressive expansion into new categories," according to the latest issue of ADVERTISING AGE. At this week's Super Show in Atlanta, the companies get their first chance to "stake their claims" for the next decade. Nike will "position hockey and soccer as the emerging sports," while Reebok will attempt to establish itself as the "athletic performance brand of the '90s." Adidas America, Converse and Fila USA will "kick off a yearlong fight to be No. 3 by carving out niches for themselves, distinct from Nike and Reebok." Reebok will channel $20M of its $70M media budget into "regional marketing efforts" -- featuring such endorsers as Frank Thomas, John Elway, Shawn Kemp, and Shaquille O'Neal. Fila use Grant Hill for its campaign, titled "A Rookie's Journal" (Jeff Jensen, ADVERTISING AGE, 1/30 issue).