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Asics Looks for Crossover Appeal With New Shoe

Asics America Corp. is lacing up for the launch of a new shoe it hopes will give the brand some traction beyond its traditional stronghold in performance running.

The Irvine-based footwear and apparel manufacturer, part of Japan-based Asics Corp., posted $1.1 billion in revenue last year, when it claimed a 12.5% share of the $10.3 billion market for performance running shoes in the Americas region. It ranked second to Beaverton, Ore.-based Nike Inc. on market share in the category, where its brand is well established with devotees of running—a core of customers who accounted for about 80% of the U.S. unit’s $286.7 million in revenue in the first quarter.

Now Asics America Chief Executive Kevin Wulff—who came on board in 2010 and has helped the brand boost sales by more than 60% since then—wants to shore up its appeal beyond its core in a bid to “own running from top to bottom.”

There’s room for Asics to grow in several categories. Specialty athletic shoes for sports such as volleyball, tennis and wrestling chipped in less 9% of the quarterly revenue. Asics’ lifestyle and fashion brands—Asics Tiger and Onitsuka Tiger, respectively—combined for around 5%. Apparel accounted for 6%.

“We do a great job in performance running, at those price points at $100 and above, so we are putting a lot of additional emphasis on what we call active running … for both footwear and apparel,” Wulff said.

The effort will kick off in earnest this week with a new shoe called GEL-Quantum 360.

It is considered “performance footwear” that can serve as an “all-around shoe,” good for training at the gym or running short distances. It’s expected to go for $170 for adults and $120 for kids at retail.

Younger Customers

Asics also will target younger customers with the new shoe—the launch dovetails with the back-to-school shopping season.

A version of the GEL-Quantum will sport urban-themed graffiti designs as the official shoe of the 2015 TCS New York City Marathon.

The launch will be supported with the “Gel Runs Deep” advertising campaign and a photo contest. Asics’ advertising agency of record, Vitro in San Diego, created the materials for digital, mobile, print, in-store displays and outdoor media ads, as well as a dedicated GEL-Quantum 360 Web page, consumer contest, and ongoing social media engagement. Publicis Groupe unit Starcom handled media planning and buying.

Asics spent $16.5 million on media placements last year and $8 million in the first quarter of this year, according to New York-based Kantar Media. It also sponsors several events, including the Los Angeles and New York marathons. Its 2015 marketing budget is estimated at about $40 million.

Wulff said Asics America’s yearly uptick in ad spending tracks with sales growth of recent years, which included a 15% jump last year (see related Addendum item, page 13).

The U.S. unit also is part of a global push to expand the Asics brand in the lifestyle category by offering new products that “retain that performance and quality while also being more fashionable,” Motoi Oyama, president and chief executive, wrote in the parent company’s 2014 annual report.

The company introduced the Asics Tiger brand for fall, a line inspired by its “athletics shoes which attracted popularity from the 1980s to around 1990.” The shoe retained “the classic shape of their predecessors while using materials and colors in new ways to create designs with a US street fashion feel.”

“Asics Tiger is now a casual footwear brand positioned to complement our Asics sports brand and our Onitsuka Tiger brand, which combines the qualities of Japanese craftsmanship and European sports luxury goods,” Oyama said. “Asics Tiger brings together Japanese technology and street fashion in a range of footwear designed to attract the attention of sneaker fans worldwide.”

Its Onitsuka Tiger brand, which made an appearance at Mercedes-Benz Fashion Week Tokyo, recently worked with Japanese textile maker Makumo on three shoe styles—Natto, Tora and Karamari. The shoes, a throwback to 1950s and ’60s models, were made using hand-printed textiles, and each retail at $100 or more.

Natto was released in June, and the rest are expected in stores this month.

“Style and design are everything to our Onitsuka Tiger customer, and we know they will appreciate Makumo’s unique, beautifully handmade textiles,” said Mike Jensen, Asics’ director of lifestyle. “This is a true representation of Japanese craftsmanship.”

The brand’s athletic shoe category also seems to be well-positioned for expansion.

“We are No. 1 in volleyball right now, and we feel that there is still a lot of growth,” he said. “We are No. 1 in wrestling, and we have great growth in training (footwear and apparel) segments. We are launching (shoes for) two new sport categories, at the end of 2015, early 2016.”

Cityzen Sciences

Asics also is looking into materials for its running and athletic apparel that communicate more than just tradition.

It partnered with Cityzen Sciences in Lyon, France, to develop high-performance textiles that can monitor body signals, including pulse rate, breath, and body temperature, as well as indicators of physical exertion, GPS position and speed. Products in development include smart running shirts that, when synced with Asics’ online training menu, can measure runner vitals without burdening the wearer, according to the company.

“Overall I think the industry is solid and strong,” Wulff said. “There is tremendous innovation occurring by Asics, as well as the industry as a whole.”

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