Sneakermania ... and a '62

Seven years ago Reebok International sold $1.3 million worth of sneakers some 60,000 Last year the figure was $1.4 billion-more than 75 million pairs. The company had passed Nike and Adidas at a full sprint. So it's safe to say that our photo of the company's CFO, Paul Duncan '62, captures him in a rare moment of repose.

Recently Financial World told the inside story of the phenomenal growth of this company that last year won 31 percent of the athletic shoe market in the U.S., yet doesn't makea single pair itself. They're made in the Far East. But all corporate decisions are made at Reebok's headquarters outside of Boston offices described by Financial World as "sparely appointed." There a lean staff racks up $750,000 in sales per employee, compared with Nike's $450,000. Its 1987 net profit of $165 million represents a 37 percent return on equity. Its pretax margin is almost double Nike's. And in the last couple of years CFO Duncan has helped negotiate upwards of $200 million in acquisitions of footwear and sportswear companies.

As Financial World reported, however, there is an ironic flip side to this success. All along, Wall Street has thought of Reebok as a fad, not a fact. The pros said it would trip over itself. So while it was sure-footedly doubling, tripling, even quintupling its annual sales, the Street sold it short. Recently a share on the NYSE was below 12, 50 percent lower than its high for the year. The magazine quoted CFO Duncan: "It would have been nice to say 'We would like to grow at 30 percent a year.' Wall Street would have loved that. Our problem was that if we had chosen back in 1985 to grow at 30 percent, Reebok probably never would have grown above $350 million, because the competition would have seen the same opportunities."

But Reebok's track record shows it knows how to anticipate its customers' wants. It just has to figure out how to maneuver in a mature market. And Paul Duncan looks ready for some fancy footwork.