The idea originally occurred to him on a quiet Sunday morning in 1972. Bowerman was enjoying a plateful of waffles he had just made in a waffle iron. Suddenly the thought struck him that the studded surface of the waffle iron could produce a revolutionary design for the soles of running shoes. "I grabbed the iron and went out to the garage," Bowerman recalls, "and poured some urethane rubber onto the iron and pressed it down. But I forgot to put in a releasing agent and totally ruined the iron. Still, I got a good impression."
Bowerman originally used the "waffle" sole as a customized feature for selected runners, but in 1975, the company decided to put it into full-scale production. The Waffle shoe was extremely popular with runners. For several years Nike had the market all to itself, because other companies regarded it as a gimmick. "The Waffle," Johnson says, "gave us the credibility we needed in the growing running market." And along with the credibility came sales in great, booming bursts.
In 1969, the tiny company had only reached $300,000 in revenues: By 1980, it was suddenly and swiftly approaching $300 million. During the late '70s; people simply went nuts over physical fitness, prticularly jogging. And when runners weren't off doing laps somewhere, they wore their running shoes anyhow to remind them of the glory of it all. Jogging shoes were in; fashion chic. Even if you were asthmatic and 50 pounds overweight, you had to have a pair of those shoes. Blue Ribbon Sports was more than happy to oblige. In the years that followed the introduction of the Waffle, the company gradually broadened its product line to include shoes for basketball, tennis, and other racquet sports, and cleated shoes for soccer, baseball, softball, and football.
Many of the new models were designed and manufactured at four company-owned plants in New Hampshire and Maine. Blue Ribbon first turned to New England in 1974 as a way to decrease its dependence on foreign manufacturers. The shoe industry in this area had long since passed its glory, but there was still an experienced labor force readily available and plants already tooled for shoe manufacturing.
Even though the New England facilities produce only 7% of the company's current requirements, a good part of its future is tucked away in a brick building on a back street in Exeter, N.H. The plant itself and a smaller adjoining structure house the company's research and development. The Bowerman waffle iron has become a bank of CAD-CAM terminals that adroitly manipulate new shoe designs, and the traditional field-testing has been amplified by a biomechanics laboratory bristling with pres-sure plates, high-speed cameras, and other scientific apparatus. In 1979, the Exeter facility scored a major technological breakthrough when it brought out the Tailwind, a running shoe that featured encapsulated air channels as part of the cushioning in the sole.
Johnson points to accomplishments like the Tailwind, as proof that there's still a lot of kick left in the company even though sales are expected to pass $450 million in 1981. He talks about Nike's forthcoming thrust into Europe and the first company-owned plant outside the United States, which will start production in Ireland in September 1981. He describes a new line of hiking and walking shoes featuring the "air sole" design and ends up detailing a greatly expanded line of sports apparel. "Some people look at our growth," he says, "and think we must be getting burned out. But, hell, we've only started the third quarter of the game."
A similar sentiment was expressed graphically in the prospectus that announced Nike's first public offering in December 1980. After the obligatory numbers, names, descriptions, and caveats, the company signed off on the last page with a picture. It showed a solitary runner at twilight silhouetted against a lake and the boldface caption: "There is no finish line." That was Nike's way of ending the past with a description of the future. It's like Johnson says, "Winning is a state of mind."
NIKE INC.: THE "SNEAKER GUYS FROM OREGON" RUN AWAY WITH SUCCESS
Year ending May 31 1976 1977 1978 1979 1980
Revenues ($ millions) 14.1 28.7 71.0 149.8 269.7
Net income per common share .04 .09 .22 .58 .77
Current assets ($ millions) 5.8 13.1 36.2 74.0 123.9
Current liabilities ($ millions) 4.6 10.5 30.9 60.7 94.3
Working capital ($ millions) 1.2 2.6 5.3 13.3 29.6
Current ratio 1.2 1.2 1.1 1.2 1.3
Long-term debt ($ millions) .5 .7 1.2 2.5 11.3
Return on equity (%) 60.0 50.0 58.5 59.7 43.4
