Athletic footwear and apparel retailer Finish Line (NASDAQ:FINL) is falling behind in the race to profitably move products off its shelves. Trends aren't looking so hot either, but don't lose hope yet.

The company just put the finishing touches on its fiscal year by announcing a 45% drop in diluted earnings. Total sales eked out a 2.5% gain due to new store openings, but same-store sales came crashing down 5.7%. Management cited weakness in more moderately priced ("non-premium") performance sneakers and women's categories, and overall malaise in "soft good" categories such as apparel and other accessories.

Finish Line ended the year with 792 total stores. 87% are the namesake stores, 11% consist of the Man Alive "hip-hop fashion retailers offering men's and ladies' name brand fashions from the industry's leading designers," and Paiva, "the company's new concept for the active woman" that just opened its doors a year ago, accounts for the remaining 2%.

During the earnings conference call, management appeared frustrated about its struggling product-mix predicament. Going forward, it intends on driving differentiation in its stores by focusing more on fashion and higher-end premium brands. To achieve this goal, it is working with Nike (NYSE:NKE), which accounts for 50% of total sales, on the product development front, and it recently hired a vice president from Nordstrom's (NYSE:JWN) men's shoe division for ideas on how to move to upscale merchandise platforms.

Finish Line's strategy reminds me of the path Payless ShoeSource (NYSE:PSS) chose to increase margins and better control brands sold at its stores. Payless is indeed marching toward branding, as it is also working with Nike by developing exclusive women's shoes offerings, and it recently inked a similar deal with Disney (NYSE:DIS) on the children's footwear front.

Time will tell if Finish Line gets its sales mix into order, but similar initiatives have worked wonders for Payless' stock price. I'll wait until Finish Line stops stuttering before becoming more interested, but recent events at least stand a chance of changing its retailing fortunes.

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Fool contributor Ryan Fuhrmann is long shares of Nike but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.