Payless, Nike to market running shoe

NEW YORK -- Discount shoe retailer Payless ShoeSource Inc. has paired up with a subsidiary of Nike Inc. to market a high-performance $34.99 running sneaker for women, a move that both companies hope will take advantage of a highly lucrative market.

Under the terms of the multiyear deal, Exeter Brands Group LLC, a wholly owned subsidiary of Nike, will design and produce the shoes under the Tailwind collection, while Payless will serve as the exclusive retailer.

Company executives, who were showcasing Tailwind products yesterday, declined to comment on potential sales volume, but Marshal Cohen, chief analyst at NPD Group Inc., a Port Washington, N.Y., market research company, said the Tailwind shoe is breaking new ground in the $3.5 billion mass market athletic shoe market because of the footwear's technology. "This takes the low end to a new extreme," Cohen said, noting that what's being offered in the high-performance athletic footwear sold at mass chains isn't high-tech.

But customers still have to pay more for Tailwind. Tailwind's running shoe, which uses a honeycomb gel that compresses on impact, is about 20 percent more expensive than footwear without much technology, according to Clare Hamill, the president and chief executive of Exeter.

Tailwind collection, which consist of five styles, including one running version and athletic sandals and slip-ons, hit 400 Payless stores yesterday, and will be expanded to 1,500 Payless stores by July. By year-end, executives said they plan to have the collection in all 4,600 Payless stores. Footwear and accessories for girls will be added in July, and the partners are considering plans to expand the Tailwind brand to men's and boys performance footwear.