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Nike Fights Back Against Toning Shoes: Will It Win?

Over the past couple months, shoe and apparel giant Nike has been beaten down for its seemingly stubborn refusal to enter the toning shoe market, which is projected to surpass $1 billion in sales in 2010. After all, it’s the reason why its share in the women’s shoe market has declined.

Skechers Resistance Runners hit shelves in July.
Source: Skechers
Skechers Resistance Runners hit shelves in July.

As Skechers and Reebok emerged as leaders in this new category, whose unique rocker bottom design claims to tone the body just by walking in them, Nike resisted, insisting that it wasn’t comfortable with the claims being made about what the shoe could do for the consumer.

Many dismissed Nike’s company line as arrogance. The company that likes to be first was now destined to be last in the marketplace that now included Avia, New Balance and others.

But a study released a couple weeks ago might suggest that Nike simply didn’t want to risk its enormous brand equity on a toning shoe category that could come crumbling down just as fast as it grew.

The study released by the nonprofit American Council on Exercise (ACE) reflected that, in many cases, the shoes failed to live up to the promises the manufacturers of the shoes made. The council’s chief science officer Cedric X. Bryant said that the shoes “are not the magic solution consumers were hoping they would be, and simply do not offer any benefits that people cannot reap through walking, running or exercising in traditional athletic shoes.”

Others quoted in the study say that not only do the shoes not help, but they also can lead to further injury including strained Achilles tendons.

But it’s hardly “case closed.” Critics of the ACE study point out that they only performed the study on 24 women, who were fit, none of whom were older than 27. That’s not the market these toning shoe companies are selling to.

Reebok says it wear-tested its EasyTones with hundreds of people over a two-year period of time resulting in more than 20,000 hours of data. For its part, Skechers –- on its Web site -- says the science behind its toning shoe, Shape-Ups, is backed up by four clinical studies, but it notes that the studies were commissioned by the company. Last week, the company reported that quarterly revenue was $505 million, a 69 percent year-over-year increase thanks in part to Shape-Ups.

And then there’s the backing of the American Podiatric Medical Association, which said it evaluated toning products and said that they are “beneficial to foot health and of significant value.”

So what’s next?

Well, for Nike, it will be about what they do best — marketing. In the past couple months, they’ve been battling the toning shoe makers through the press. Now, they’ll reach out to the consumer, tell the consumer of the opinion that those shoes don’t work, and offer a middle ground – a women’s training shoe called the Nike Air Max Trainer One. The shoe doesn’t do any work for the wearer as the toning shoe companies claim, but it aims to ease the blow of training activities that women typically do.

Nike is running ads like the one below over the next three months in issues of women’s magazines including Seventeen, Teen Vogue, Cosmopolitan, Glamour, Lucky, Shape, Fitness and Women’s Health.

“The Ultimate Quick Fix” gets readers to stop just like they’ve stopped for all the toning shoes. Then it takes a second shot at its competition by saying “The Shoe Works If You Do.”

"Nike knows you have to train to tone," said Nike spokesman Derek Kent. "There are no shortcuts. It's about combining exercising with proven technology to get real results. We want to serve the consumer every way she trains. We won't ask her to compromise on performance, stability and flexibility."

Nike doesn’t usually respond to what other companies do. They don’t get into a back and forth because they don’t have to. The toning shoe category has blown up so quickly and blindsided them that now they have to go on the offensive by publicly telling their brand fans that it’s not that they’re late to the game – it’s that they didn’t want to play in that game because they don’t believe in it.

As the market leader, they can afford to say that. The jury is still out on whether anyone will listen.

"No one is saying that the shoes alone will help you lose 20 pounds, but people feel like it is doing something for them." -SportsOneSource, Matt Powell

Matt Powell, analyst at SportsOneSource, a market retail tracking firm, has been the most vocal critic of Nike’s sitting out of the toning business. He says he hasn’t seen anything yet that will change his opinion.

“Go on sites that sell these shoes and look at the reviews,” Powell said. “They are uniformly positive. No one is saying that the shoes alone will help you lose 20 pounds, but people feel like it is doing something for them.”

Powell maintains that this is exactly what happened in the mid-1980s when Reebok invented women’s aerobic shoes. Nike stayed away and Reebok stole the No. 1 shoe market share spot by 1989.

Said Powell: “Nobody is going to take the top spot from Nike anymore, but they’re really missing out on a big opportunity.”

(For more on this story, watch "Squawk on the Street" in the 10 a.m. hour Tuesday, August 3.)

Questions? Comments? SportsBiz@cnbc.com

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