A step ahead of the pack: Steven Nichols says K-Swiss survived a glut in the shoe market by being choosy about its retailers. (People).

IN 1987, Steven Nichols took over a tennis shoe company that was, as he now describes it, "basically bankrupt." Nevertheless, the chairman and CEO of K-Swiss Inc. returned the company to profitability within three years.

Then, after nearly a decade of slow and steady growth, the Westlake Village-based

Today, Nichols, also K-Swiss' biggest shareholder, heads a company in comeback mode, just wrapping up a quarter in which it reported record-breaking sales. For the quarter ending June 30, the company reported net income of $6.1 million on revenue of $74.5 million, compared to $4.1 million in net income on revenue of $55.4 million during the same period last year.

This at a company whose biggest seller, contributing two-thirds of total revenue, is a shoe that hasn't changed in almost 40 years. The K-Swiss Classic was created in 1966, the same year the company was founded it was the first mass-produced leather tennis shoe at a time when most tennis shoes were still made of canvas or plastic.

Although last year's economic downturn put a damper on the company's bottom line, Nichols, like others, took advantage of plummeting stock prices to buy back $75 million of K-Swiss shares.

He believes that, for K-Swiss, the downturn is over. It has $75 million in cash and recently acquired two independent shoe companies to further spur its growth.

Nichols, who spent more than 30 years at Massachusetts-based shoe manufacturer Stride Rite Corp., remains the driving force behind the $200 million company he acquired 15 years ago for $20 million.

Nichols began publicizing the always popular K-Swiss Classic and developing so-called high-performance shoes to compete with Nike and Adidas. By moving the company into tonier retail stores and playing up its Swiss origins in its advertising campaigns -- the company was founded by two skiers -- K-Swiss slowly regained market share and appeal among children and young adults.

Looking ahead, Nichols hopes K-Swiss can cash in on the appeal of athletic shoes without laces after its acquisition of Royal Elastic, a five-year-old startup that makes colorful athletic footwear with elastic.