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A HIPPER SNEAKER // Rapping with Reebok

The images that sell Reebok sneakers these days are edgy.

One ad depicts the devil. Another shows fingerprints on what appears to be a police booking form, as rapper 50 Cent advises buyers to "take advantage of today because tomorrow is not promised."

A controversial television ad last year had 50 Cent, a former drug dealer who has rapped about being shot nine times, counting aloud the bullets that were fired at him. The rapper laughs and then looks into the camera as a voice-over asks, "Who do you plan to massacre next?" The ad was withdrawn in Great Britain.

Reebok's "I am what I am" campaign is a significant shift for the sneaker brand that gained traction pitching subtly styled, lightweight shoes to American women who embraced the aerobics phenomenon of the 1980s.

These days, however, there's more money in selling to teenage boys - a reality not lost upon Adidas-Salomon AG, which completed a $3.8-billion buyout of Reebok International Ltd. Jan. 31 and plans to keep the Reebok brand name alive. Reebok's profits rose more than 20 percent in 2003 and 2004, and were up 37 percent through the first nine months of last year.

Adidas must decide whether to stick with a marketing campaign that has yielded short-term sales gains among younger consumers. But the campaign is angering activists - although it has spurred no boycotts - and industry analysts say it risks alienating customers who prize sneaker performance over fashion.

"Promotion and marketing of footwear, or any clothing, is not and must not be a moneymaking tool referencing gun violence, drugs or gangs," said Liz Bishop-Goldsmith, president of Mothers Against Guns.

Reebok, which also has featured rapper Jay-Z, has gone further than market leader Nike Inc. and other rivals in embracing hip-hop culture and youth-oriented entertainment alongside athletics.

As the aerobics craze cooled, the brand expanded into basketball, football and other sports and signed endorsers such as edgy basketball star Allen Iverson. Reebok's hip-hop foray began in 2002 with the street-inspired "RbK" line, and in November the company said it will begin producing Reebok-branded TV programs for a new Comcast Corp. on-demand hip-hop channel.

Reebok's chief marketing officer, Dennis Baldwin, said market research conducted after a late 1990s sales downturn revealed that Reebok needed to retrench in response to a changing youth market.

"They weren't distinguishing between athletes and entertainers and other things that were influencing youth culture," Baldwin said. "So when we looked at the market, we said, "Yeah, Allen Iverson is incredibly influential, but so is Jay-Z.' "

Reebok's "I am what I am" ads celebrate individual empowerment and overcoming adversity, Baldwin said. Alongside the bad-boy ads are some softer spots, including ads with actors Lucy Liu and Christina Ricci.

Other Reebok endorsers have less-than-squeaky-clean pasts that might scare away other companies. 50 Cent, whose real name is Curtis Jackson, and Jay-Z have made no secret of their drug-dealing pasts or difficult upbringings. Jay-Z used his real name, Shawn Carter, for a signature line of Reeboks known as the S. Carter Collection, which preceded 50 Cent's G-Unit line.

The Congress of Racial Equality, a civil rights group, says Reebok promotes negative messages about black men.

"50 Cent was a drug dealer and proud of it," CORE spokesman Niger Innis said. "The fact that corporations are going to reward that kind of behavior is an outrage."

While there are risks in taking on such endorsers, consumers no longer demand squeaky-clean reputations, said John Quelch, a Harvard Business School professor who served 12 years on Reebok's board beginning in 1985.

"The broader public is used to this these days and does not generally punish the brand for associating with a few such celebrities," Quelch said.

Analysts credit Reebok's marketing shift for boosting the former No. 2 U.S. sneaker and athletics apparel maker's prospects against Nike - a competition that could become more heated now that Reebok is paired with Adidas.

A FOOT UP?

Analysts credit Reebok's marketing shift for boosting the former No. 2 U.S. sneaker and athletics apparel maker's prospects against Nike - competition that becomes more heated now that Adidas has acquired Reebok.

U.S. market share for athletic footware (2004)

Nike: 36%

Reebok: 12%

Adidas: 9%

Sales by category

Adidas Footwear: 42% Apparel: 39% Other: 19%

Reebok: Footwear: 64% Apparel: 36%

Sources: Sporting Goods Intelligence; the companies

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