Still, the 60-year-old Davis quips of his running: "I'm using the term loosely as I get older."

So too, it seems, are New Balance's core customers.

It was the die-hard baby boomer jogging generation that helped Davis transform the family-owned outfit he bought in 1972 into an industry power, with $1.3 billion in annual sales. But as boomers jog less and walk more, Boston-based New Balance needs a new strategy — after years of explosive growth, worldwide sales were flat last year over 2002.

Davis wants to hook younger athletes on the New Balance brand. But he insists he won't abandon what has set New Balance apart: function over fashion, word-of-mouth marketing over celebrity endorsements and manufacturing a sizable percentage of its shoes in the U.S. even as competitors chase cheaper labor overseas.

Davis thinks the way to achieve that is through the team market — not the pros or big universities, but high school and smaller college teams. He expects at least 2,500 high school basketball teams to lace up New Balance this year, up from 1,000 in 2003.

"We don't want to get into the fashion game or the endorsement game, which our competitors do," Davis told the Associated Press in a recent interview. "We feel what we're best at is grass roots. We do the grass roots with these teams, we get the young kids in the shoe, even the kid that doesn't play basketball or run track sees all of his peers in those shoes, he or she might buy a pair himself."

He also wants to expand beyond basketball and track, the traditional New Balance niche. New Balance recently bought Warrior, the country's only company specializing in lacrosse shoes. The deal gives New Balance an inroad with a sport that's growing in affluent suburbs, and potentially opens up distribution channels for other sports with complementary seasons, like field hockey and soccer.

The grass-roots marketing has worked before, Davis says.

"When we started as a running shoe company," he said, "that was our whole approach, going out to the races and giving people shoes and saying, 'What do you think?' and working with them. We're good at that. We're very good at that."

When Davis bought New Balance for $100,000, it was turning out 30 pairs of shoes a day. Traditional customers included runners as well as cops and retail clerks whose jobs kept them on their feet all day.

Under Davis, who owns the company with his wife Anne, New Balance grew rapidly, boosted by the jogging craze of the 1970s. Sales jumped from $100,000 in 1972 to $361,000 by 1974 and $1.3 million by 1976. By 1985, they hit $80 million and by 2002 $1.3 billion.

Although revenue flattened in 2003, New Balance has still held its own in a tough footwear market. Though sales are measured in different ways, market researchers put the company in the top 4 worldwide, and NPD Group reports New Balance is No. 2 in the United States, behind Nike.

The dilemma of the aging customers isn't a new one, and Davis has already had some success confronting it. New Balance branched into walking shoes, and in the 1990s its trail-running line was both a fashion and performance hit, helping the company jump from No. 8 to No. 3.

Still, Davis refused to turn the company into a marketing and fashion specialist. By doing so, he actually helped his pitch to younger buyers, said Andrew Rohm, a Northeastern University marketing professor and former marketing executive at Reebok.

The younger consumers "saw New Balance as authentic, as credible," Rohm said. "They weren't being sold to in a way. Other brands may have come across as too aggressive."

Other than a $1 million endorsement deal with NBA star James Worthy in the early 1980s, Davis hasn't hired celebrity athletes to hawk his products, and doesn't plan to. While competitors advertised on prime-time TV, New Balance focused on Runner's World magazine and spent its energy talking up its products to retailers and making sure they got the merchandise they wanted.

"Some people would call them boring, but retailers loved them because they were always in stock and they could supply retailers with wide sizes," Rohm said. "Kids walk into Foot Locker, they haven't seen a TV campaign, but they see the shoes on the wall, and that's important, what happens at the point of sale."

Even more unusual, New Balance has kept 25 percent of its manufacturing in the United States. That percentage is declining, Davis concedes, but he says total U.S. production is growing. New Balance claims the number of jobs at its five U.S. manufacturing plants rose 52 percent between 1995 and 2002.

"We think it allows us to make better shoes abroad," Davis said. "Our competitors design the shoes and send all the stuff over there and tell them how to make it. We will design the shoe and then go over there and show them how to make it."

Davis admits the company will spend the next few years fighting for market share in U.S. footwear, but hopes current overseas volume of 35 percent will rise rapidly, boosted by China. It is also trying to boost its apparel sales, from just 3 percent of U.S. sales in 2003 to 10 percent or 20 percent.

Still, rivals may be better positioned to fight the apparel battle, and set the marketing agenda. Reebok, for instance, is pushing aggressively into partnerships with music and entertainment celebrities like Jay-Z and 50 Cent, a campaign Rohm says is flourishing.

Another, less obvious threat: Adidas-Solomon. Like New Balance, it's after the high-end market, but it's also showing advertising muscle.

"When you talk authenticity and credibility you also have to talk Adidas," Rohm said. "This may be a threat because they're competing for the same pie."

John Horan, publisher of industry newsletter Sporting Goods Intelligence, says New Balance's insurance policy is a brand and a bond with core customers so unique that it would be difficult for even the most aggressive rivals to simply muscle their way in.