|THE FIRST SNEAKER VENTURE — Paul Fireman bought Reebok’s North American sales rights in 1979, then capitalized on the ’80s aerobics craze to build a mega-brand. (Boston Globe/File)|
Paul Fireman takes another shot
Five years after selling his stake in Reebok, he invests $20m in a Colorado sneaker maker
Reebok International founder Paul Fireman is jumping back into the running-shoe business, with an investment of close to $20 million in a Colorado sneaker maker that aims to capitalize on the industry’s biggest innovation in decades: shoes that mimic barefoot running.
If Fireman has been looking for his next act, perhaps he has found it in Newton Running Co., a Boulder start-up that specializes in $175 sneakers built to emulate a shoeless stride — yet with enough cushioning to protect skin and joints from the realities of pavement pounding. He and his Fireman Capital Partners will take a roughly 30 percent stake in Newton.
“I never thought I’d be involved in anything to do with an athletic or shoe company again,’’ said Fireman, 67, who five years ago sold Reebok to Adidas-Salomon for $3.8 billion and personally reaped $800 million. “But this one intrigued me.’’
Newton’s chief executive and co-founder, Jerry Lee, will retain a majority stake in the company. An avid marathoner who has run Boston three times — though he prefers Boulder’s mountain paths — Lee insists this is not a niche product. Footwear to enable a “midfoot’’ style of running, rather than the more common heel striking, is in high demand, he and other industry specialists said.
“In my view, this is probably the largest single revolution in running footwear since the Nike air bag,’’ said John Fisher, the former chief executive of shoemaker Saucony Inc. who now teaches marketing at Babson College. “The idea of minimalism will continue to grow in geometric leaps and bounds.’’
Fisher said it has been decades since anything truly new has emerged in the running shoe business, and that Fireman could well be seizing on a large opportunity, “where you put one and one together and you don’t get two — you get nine.’’
This new trend in running, marked by brands like Vibram FiveFingers, isn’t for everyone. Critics said some people are getting injured using so-called minimalist shoes, with thinner soles than many Americans have grown accustomed to over the past few decades.
Colin Peddie, owner of Marathon Sports, a specialty running store in the Boston area, carries Newton Running shoes in his shops and runs in them himself. He said he sees them as a training tool to be used several days a week, a shoe that can help runners change up their technique and avoid certain common injuries, like knee problems, from landing hard on the heels mile after mile.
“I’m rooting for the brand. I like it,’’ Peddie said, noting that Newton is not an extreme minimalist shoe, and offers heel cushioning. But, “It takes some education.’’
Lee, whose main career has been in real estate development, said he and co-founder Danny Abshire have been working on the Newton concept for 17 years. They launched the company in 2007, selling shoes one pair at a time at triathlons and other races, Lee said, and now are seeing triple-digit annual growth.
Last year, the company had about $10 million in sales and sold its shoes in 600 retail stores and online. It is still lean, with 36 employees; the shoes are made in China, like many running shoes.
He said the company decided to take on outside investors, and in particular Fireman Capital, because it needed money to grow and wanted to tap Paul Fireman’s experience.
Fireman made his bet on the British Reebok brand back in 1979 and invested $65,000 to acquire the company’s North American sales rights. He capitalized on the aerobics craze of the 1980s and created a mega-brand.
He has openly lamented what he sees as Reebok’s decline as a dominant brand since the company was sold.
Newton Running is Fireman Capital’s sixth investment since the firm started in 2009. Other deals include Hudson Jeans and juice company Evolution Fresh. But it’s clear Fireman and his son, Dan Fireman, who runs the private equity firm, were eager to make an investment in the world where the family made a fortune.
“Newton Running is the footwear partner we’ve been seeking for quite some time,’’ Dan Fireman said. His father will lend his legendary status in the industry to Newton’s marketing and design plans.
But Paul Fireman isn’t yet claiming he can recreate Reebok’s success with Newton.
“I think the potential could be reasonably grand — I don’t know how grand,’’ he said. “Whether it can convince the world to run differently or not remains to be seen.’’
Beth Healy can be reached at firstname.lastname@example.org.