With its roots as a popular basketball shoe worn by professionals, Converse has morphed under NIKE into a fashionable footwear maker for those off the court, too. It has sold some 750 million pairs of its classic Chuck Taylor All Star canvas basketball shoes, which appeal to consumers ranging from kids to clothing designers. It also licenses its name to sports apparel makers. Converse produces products under the One Star, Star Chevron, and Jack Purcell names. It sells them through its own stores and through retailers the likes of Target and even DSW. Converse operates as a separate unit from NIKE's competing sports brands, reining in the kitsch value of Converse's vintage Chuck Taylor brand.
Converse, which sells its products through five in-line retail outlets in Boston, California, and New York, maintains a facility in Ontario, California, from which it ships products for two of NIKE's affiliate brands -- Converse and Hurley.
Converse has hit its stride, even while some manufacturers and retailers stumbled during the recession. In 2011 the shoe maker logged double-digit percentage revenue growth, driven by increased licensing revenue in China and boosted sales in the UK as the NIKE unit transitioned that market to an owned distribution model. Revenues for Converse, as part of NIKE's Other Businesses segment, grew 11% in 2012; the footwear maker has accounted for more of NIKE's revenue in recent years. Converse generated 43% of the segment's sales in 2012, up from 41% in 2011 and 39% in 2010. Converse continues to be recognized as a top contributor among a handful of brands. Indeed, NIKE announced in May 2012 that it plans to divest its big-name Cole Haan and Umbro units to focus on growing the NIKE, Jordan, Converse, and Hurley brand names.
Converse counts its strategy of regularly rolling out new products to keep consumers enticed to keep adding Converse shoes to their closets. The rise, despite a downturn in the economy during the past couple years, can be attributed to increased consumer demand in the US and internationally. What has helped to spur the increase is Converse's launch of a sneaker line linked to classic rock brands, such as The Who and Pink Floyd. The Who tribute shoe, emblazoned with the Union Jack and available only on the company's website, outpaced the firm's previous best seller -- the basic black Chuck Taylor. Converse has added to its collection by debuting sneakers featuring Metallica and AC/DC, as well as a line of Dr. Seuss-inspired sneakers for men, women, and children through a deal with Dr. Seuss Enterprises. The shoe company further identifies with musicians through its Converse Rubber Tracks, a recording studio it opened in Brooklyn in mid-2011 that's offered free to recording artists and groups. Converse is known to form long-term, strategic partnerships with professional athletes. One such agreement is its deal with basketball star Elton Brand for a line of inexpensive basketball shoes sold exclusively in J. C. Penney stores and on its website. The first in the series -- called the EB1 -- retailed for $65. With the US economy in a tailspin at the time of the rollout, the low-cost shoe line benefited from auspicious timing. Converse then made an EB2 for J. C. Penney for the 2009-2010 NBA season. Its business with J. C. Penney is one of several key relationships for Converse. Foot Locker, the company's largest customer, accounts for about a fifth of sales. The company's shoes are also sold at other retailers nationwide, as well as online.
▲ Show Less▼ Show Full Description