Timeless Converse sneaker gets a major makeover in wake of acquisition
By Stephanie Kang
The Wall Street Journal
Few shoe styles have been alive longer than Converse's Chuck Taylor All Star, the canvas-and-rubber basketball sneaker that legions of hard-core fans have elevated to an antifashion icon.
For almost 75 years, Converse has sold "Chucks" in a limited range of colors and just two basic styles -- low tops and high tops. Simplicity has been part of their appeal, especially with teens eager to show their disregard for mainstream trends and high-price athletic shoes. Sales were hotter some years than others, but they never fizzled out, making Chucks and their steady sales a prized franchise in a fickle business.
Recently, though, sales of the All Star have been heading north on a fast track, the result of a whirlwind marketing effort this past year that brought more than 1,000 types of Chucks to retail chains such as Foot Locker and Journeys, as well as to high-end boutiques like Barneys New York. The standard high and low tops still cost only $38, but pricey variations include gold-metallic Chucks ($72), knee-high shearling-lined Chucks ($175), pin-striped Chucks ($55) -- even Chucks designed by menswear designer John Varvatos ($95). "Limited edition" snakeskin high top Chucks sell for $1,800.
Converse's transformation from fashion rebel to fashionista is largely the work of Nike Inc., Converse's parent company since 2003. The Beaverton, Ore., shoe giant is known for smothering acquisitions with the Nike name and swoosh logo: In 1995, after buying Canstar Sports, the maker of Bauer hockey equipment, Nike changed the company's name to Nike Bauer Hockey and stamped the swoosh on hockey sticks and skates -- much to hockey fans' irritation. In the industry, the strategy became known as "Beaverizing."
With Converse, Nike is staying well below the radar: It put its research-and-development archives and its storied marketing muscle at Converse's disposal, but there isn't a swoosh in sight at Converse's North Andover, Mass., headquarters. Neither the Nike name nor logo appears on Converse shoes.
"We looked at ways we can help them without being too invasive," says Mark Parker, Nike's chief executive. In addition, Nike has raised Converse's advertising profile: Converse spent $17.6 million on ad media in 2005, according to TNS Media Intelligence, more than quadruple its 2004 spending and a quantum leap beyond its pre-Nike ad spending of $163,500 in 2001.
So far, the move seems to be working. Converse's 2005 athletic footwear sales in the U.S. hit $400 million, or 1.5 percent of the market, a threefold market-share increase since 2001. That's still tiny compared with Nike's 35 percent. But year-to-date, Converse's sales are up 12 percent, compared with a 5 percent increase for athletic shoes overall, according to the consulting firm Sports One Source.
Some devotees of the old Chucks see the Nike hand at work, and they don't like it. Jeremy Wineberg, a former manager at Paliskates, a Pacific Palisades, Calif., skate shop, says the limited-edition Chucks don't have the older models' appeal. "What's happening is that Converse has now gotten greedy," he says. "That's why those are not as cool."
David Maddocks, Converse's chief marketing officer, says the All Star's "universal appeal and democratic image" explain why Converse can sell so many varieties. "We serve the market by merchandising this franchise to a globally diverse customer base and meeting their demand," he says.
Nike realizes it risks overdoing it. "It's such an iconic shoe that we're trying to be careful not to overextend it," Parker says.
The effort to revamp Chucks comes as Nike digests several acquisitions, including surf brand Hurley International and Exeter Brands Group, the maker of the lower-price Starter line of apparel and footwear. It will in some ways predict how well Nike can maneuver in the athletic-shoe market's lower-end and in niche segments, where the swoosh historically hasn't tread.
Chuck Taylor All Stars helped Converse, founded 98 years ago, dominate the athletic-footwear industry for generations. Introduced in the early 1930s, the basketball shoe was named for a legendary Converse salesman, who played for pro basketball teams such as the Akron Firestone Non-Skids. Taylor traveled from town to town, running basketball clinics and getting the best local players to wear Converse. By the 1950s, Converse was the dominant brand in pro basketball.
But basic Chucks became obsolete in basketball, displaced by rivals such as Adidas and Pro-Keds in the 1970s. The brand fell further behind in the 1980s, when Nike put a potent mix of shoe technology and big-budget marketing behind Chicago Bulls star Michael Jordan, changing athletic shoes and sports marketing forever. Chuck Taylors seemed to be permanently on the bench.
But even as Converse lost favor with pro players, it stumbled on a new fan base off court: Rockers Joey Ramone and Kurt Cobain were among the first slacker heroes to wear Chucks, influencing the footwear of millions of anticorporate rebels for years to come. An unsuccessful push into performance footwear and apparel helped to send Converse into bankruptcy proceedings in 2001. An investment group bought the rights to Converse and would resell the company in 2003 to Nike for $310 million.
Nike prompted Converse to create an internal guide to its brand identity and heritage, complete with pictures of James Dean, Julius "Dr. J" Erving and kids wearing Chuck Taylors and other Converse shoes. More importantly, Nike opened the doors of its creative product labs. Now, Converse's tiny, 12-person design team works part of the year with Nike engineers, designers and biomechanic experts to come up with new products.
One result is that Converse is back on pro basketball courts again, and this time the performance shoe -- Converse's Wade, named for Miami Heat superstar Dwyane Wade -- is selling. Next season, Converse is set to launch "All Star Revolution," a shoe inspired by the Chuck Taylor look but stuffed with the kind of cushioning and technology that is standard for performance shoes.
The Nike influence also has helped Converse offer customized Chucks. Customers go online to personalize a pair of Chucks, choosing a color or a pattern, like skull-and-bones, for the shoes' laces, rubber soles, racing stripe, tongue or canvas body. Initials or words -- available in a choice of two fonts -- can go above the heel. "Every part of the business has benefited" from the collaboration, says Jack Boys, Converse's CEO. "I'm sure glad we're part of the team," he adds. "Nike is a little scary. ... If you get in their way, they can squash you like a bug."