Nike loses its footing in the fashion stakes

NOT SO LONG ago they were de rigeur for anyone aspiring to street- chic. Designer trainers were statements of style, and Nike one of the most stylish of all.

Now, however, the fashion gurus say trainers have had their day, and Nike yesterday revealed a 69 per cent slump in earnings in the final three months of last year.

As a result, the company will cut 1,600 jobs, or 7 per cent of its workforce.

Nike says the current woes are largely due to turmoil in the now limping "tiger" economies in the Far East, and and an "oversupply" of the product in its largest market, the United States.

Two years ago the company, along with rivals, was accused by Christian Aid of exploiting Third World workers. The charity also said that trainers were advertised by international athletes like Linford Christie for more than pounds 50 a pair, but the average labour costs of producing them is 46p in China and pounds 1.19 in Thailand.

Nike announced, following the criticism, that it would introduce independent monitoring of its factories.

Yesterday, it said the cutbacks would make the company leaner and more competitive.

Industry watchers do not, however, see a quick turnaround for the giant multinational. Diane Daggatt, of US analysts Dain Rauscher, said: "They have got to work through all these issues, primarily inventories and slowing demand."

She added that an upturn could begin in l999, but will Nike, and the other famous brands such as Fila, Adidas, Vans and Converse ever have a market as lucrative as in the past?

Not if the young buyers see their idols abandoning them. The Verve, said by the cognoscenti to be the coolest band around, wear not trainers, but Clark's Wallabees. And Calvin Klein's models are no longer shod in scruffy trainers but work boots.

The Face magazine says "smart shoes are the way to walk this year" and another style magazine, I-D, stated "flashy silver trainers are being overlooked in favour of rugged, subtly shaded action shoes".

Total sales of sports footwear fell by 3.5 per cent in l996, compared to a rise of 7.7 per cent the previous year, and according to analysts the market is saturated.

Philip Armitage, a sociologist, said: "Fashion is fickle ... If trainers are now considered naff by the trendsetters then this will permeate down to the market in general over a course of time.

"Designer trainers are not, of course, going to disappear, but they are likely to stop being seen as compulsory wear. A lot of parents will breathe a sigh of relief at that - until the next fad comes along."