L.A. Gear Hits Its Stride With $20-Mil. Campaign in Tow: Analysts Say Marketer Is Poised for Recovery After a Misstep Into Technical Footwear By Kathy Tyre

SANTA MONICA, CALIF. - L.A. Gear is readying an estimated

‘We are no longer in an era of brand repair,’ said L.A. Gear president Mark Goldston. ‘Now we want to use the panache factor, the specialty within L.A. Gear, to drive the business.’
After an unsuccessful jump on the technical footwear bandwagon, L.A. Gear has gone back to its roots as a fashion athletic footwear marketer. Now, even the L.A. Tech line, originally designed to compete with ‘serious’ athletic footwear, is backed by a ‘science of fun’ positioning.
Though L.A. Gear has yet to record a profitable quarter, analysts said its positioning is likely to begin paying off shortly.
‘They’ve come farther in the last 18 months than any company has come in a long time,’ said Gary Jacobsen, footwear industry analyst with Kidder Peabody, N.Y. ‘They’re still losing money. But I believe their August quarter will be the company’s first profitable quarter in three years and that 1994 will be profitable for them. That’s because there will be a large amount of footwear business to be done in the $40-60 price range.’
The current slowdown in the higher-priced category, which has lead to a recent softening of sales at Nike and Reebok, relates to fashion and variety becoming a more important element in buying shoes than technical fireworks, according to Jacobsen.
‘Eighty percent of the people who buy athletic footwear don’t buy it for the purpose it’s intended, so it’s a fashion issue,’ said Jacobsen.
The women’s fashion and footwear campaign, set to debut next month from agency Ogilvy & Mather/N.Y. under the themeline ‘The Sport of Style,’ includes a television spot from the hot team of Rocky Morton and Annabel Jankel, who directed current Disney release Super Mario Brothers. Print will include a 12-16 page insert in Vogue. At the same time, L.A. Gear will break a second generation of L.A. Tech Light Gear ads with the continuing theme, ‘If you want to own the night, own the light.’ In September, the company will launch a major back-to-school TV blast for Kombat Gear, a new line of combat boots, and for the Street Hiker line.
L.A. GEAR’S PERFORMANCE
1991 1992
Net Sales $619.2M $430.2M
Net Loss $66.2M $71.9M
Copyright Adweek L.P. (1993)