Converse

The Beginning

Sometime in 1908, Marquis Mills Converse decided to start a rubber shoe company, bypassing a rubber trust that prevented most companies from doing business directly with their retailers. Early catalogs bragged about how many trucks left the Converse factory in Malden, Massachusetts, delivering product directly to stores in Boston. Mr. Converse’s idea worked. But more importantly, it survived.

1908-1918

In 1913, Converse produced a catalog with the following words: “Our company was organized in 1908 fully believing that there was an earnest demand from the retail shoe dealer for a rubber shoe company that would be independent enough not to follow every other company in every thing they do.” Those words would prove prophetic. Always a brand for those independent enough not to follow, the young company would take up with a young sport: Basketball. Also, Converse made tires. But the basketball shoes gained more traction.

1918-1928

Chuck Taylor joins the Converse Rubber Company. How it happened remains lost to history, but the reason isn’t: Chuck Taylor loved basketball and desired nothing so much as to spread of the word of the new game and sell the sneakers it required.

1928-1938

By the time he lent his name to his signature badminton shoe in 1935, Jack Purcell had won five consecutive Canadian championships and been declared the world badminton champion. The Jack Purcell sneaker retains the legacy of its namesake and the feel of his sport.

1938-1948

World War II provided Converse with a singular opportunity. Many products destined for servicemen overseas now became a focus of Converse manufacturing. The product range included footwear, apparel, boots for pilots and army servicemen, parkas, and rubber protective suits and ponchos.

1948-1958

The invention of Rock & Roll. It was loud, lewd, filthy and everything everyone who feared it said it was. It was also a movement in search of a uniform: It found the leather jacket, the blue jean and the high-top sneaker. Interestingly enough, right about this time, the high-top sneaker was around for the birth of something else: The National Basketball Association.

1958-1968

A decade of change — for everybody. Rock & Roll and pro basketball grew up (in Chucks), and All Stars finally came in colors. In tumultuous times, legends are born — and from a green and white basketball team to a British invasion, from rooftops to alfalfa fields, Converse was along for the ride.

1968-1978

Somewhere right around 1974, the All Star sneaker got a little bit of a makeover. Remade in colorful suede with a big, bold star on the side, it was built for basketball—but there was something about its brashness and brightness that would make it irresistible to a generation of rockers, skaters and rebellious souls. Then around ’76 came the Pro Leather, an instant favorite in a time when the game needed a vibe.

1978-1988

An immediate on-court favorite, the Weapon sneaker became almost universally favored by professional, college and high school teams throughout the 1980s and ’90s. In 1986, Converse launched the “Choose Your Weapon” ad campaign, featuring two of the game’s biggest rivals wearing one of the game’s biggest shoes. Over 20 years later, the legacy of Weapon — and its place in sport and culture — continues to challenge the competition.

1988-1998

First came Grandmama. That was a big deal. Then, in 1996, Converse had a hit on its hands with a basketball shoe called the All Star 2000. It was the first attempt at replicating the Chuck Taylor All Star sneaker for contemporary competition, and there was something about its ankle patch, red midsole stripe and no-nonsense approach to the game that at least 1 million people couldn’t resist.

1998-2008

The brand enters its second century by honoring its heritage of seeing things a little differently, loving people who want to change the world for the better, and basically celebrating the spirit of rebellion and originality in basketball, Rock & Roll and anywhere else you find it.

And there you have it — for now… The best stories are the ones that don’t end — the ones you just keep adding to and adding to — all the while marveling at the creative, disruptive, optimistic, courageous ways things evolve from being what they were, to what they are, to what they will become.

Converse (shoe company)From Wikipedia, the free encyclopedia

Converse, Inc.

Type Subsidiary of Nike

Industry sporting goods

Founded 1908 in Malden, Massachusetts

Headquarters North Andover, Massachusetts

Products shoes, aparell

Owner(s) Nike

Website converse.com

Converse is an American shoe company that has been making shoes since the early 20th century.

Miscellaneous Converse shoes

Contents

 [hide]

1 History

o 1.1 1908–1941: Early days and Chuck Taylor

o 1.2 1941–Present: War, bankruptcy, and new management

o 1.3 Chuck Taylor All Star basketball shoe

o 1.4 The Weapon

o 1.5 Special editions

2 Converse college teams

3 See also

4 References

5 External links

[edit]History

[edit]1908–1941: Early days and Chuck Taylor

In his late 30s, Marquis Mill Converse, who was previously a respected manager at a footwear manufacturing firm, opened the

Converse Rubber Shoe Company (completely unrelated to the Boston Rubber Shoe Company, founded by fourth cousin Elisha

Converse) in Malden, Massachusetts in 1908. The company was a rubber shoe manufacturer, providing winterized rubber soled

footwear for men, women, and children. By 1910, Converse was producing 4,000 shoes daily, but it wasn't until 1915 that the

company began manufacturing athletic shoes for tennis. The company's main turning point came in 1917 when the Converse All-

Star basketball shoe was introduced. Then in 1921, a basketball player named Charles H. "Chuck" Taylor walked into Converse

complaining of sore feet. Converse gave him a job. He worked as a salesman and ambassador, promoting the shoes around

the United States, and in 1923 his signature was added to the All Star patch. He tirelessly continued this work until shortly before his

death in 1969. Converse also customized shoes for the New York Renaissance(the "Rens"), basketball's first all black pro

basketball team.

[edit]1941–Present: War, bankruptcy, and new management

When the United States entered World War II in 1941, Converse shifted production to manufacturing footwear, apparel, boots,

parkas, rubber protective suits, and ponchos for pilots and troops. Widely popular during the 1950s and 1960s, Converse promoted

a distinctly American image with its Converse Yearbook. Artist Charles Kerins created cover art that celebrated Converse's role in

the lives of High School and College athletes, as the essential sports shoe. In the 1970's, Converse purchased the trademark

rights to Jack Purcell sneakers from B.F. Goodrich.[1]

Converse Jack Purcells.

Red Chuck Taylor All Star basketball shoe.

Converse lost much of its apparent near-monopoly from the 1970s onward, with the surge of new competitors,

includingPuma and Adidas, then Nike, then a decade later Reebok, who introduced radical new designs to the market. Converse

found themselves no longer the official shoe of the National Basketball Association, a title they had relished for many years.

The loss of market share, combined with poor business decisions, forced Converse to file forbankruptcy on January 22, 2001. When

the company subsequently changed hands that year, the last factory in the United States was closed. Thereafter, manufacturing for

the American market was no longer performed in the United States, but instead in a number of Asian and European countries,

including China, Indonesia, Italy, Lithuania and Vietnam.

On July 9, 2003, the company accepted a $US305 million purchase offer from rival Nike.[2]

Current NBA players wearing Converse include Kirk Hinrich, Kyle Korver, Alando Tucker , Maurice Evans, Acie Law , Udonis

Haslem, and Elton Brand.

Converse fashion in Paris

Joshua Mueller, Guinness Book of World Records holder for largest collection of "Chucks"

[edit]Chuck Taylor All Star basketball shoe

For more details on this topic, see Chuck Taylor All Star.

The Chuck Taylor All Star shoe has developed a number of nicknames over the years, such as: "Cons", "Connies", "Convics",

"Convos", "Verses", "Chuckers", "Chucks", "Converse", "Chuckies", "Chuckie Ts", or "Chucker Boots" or "Chuck Taylors" for the

higher styles.[citation needed] For decades the Chuck Taylor All Star basketball shoe only came in black, with a white variant released in

1947. Under pressure from basketball teams Converse decided in 1966 to manufacture other colors. Different materials also began

to be used, starting in the 1970s, including leather, suede and vinyl, and even hemp, rather than just canvas. Besides high-tops,

low-cuts and later knee-high versions were produced. After Converse was bought by Nike, operations were moved from the United

States to overseas, although the design has had few alterations. The fabric is no longer 2-ply cotton canvas but 1-ply "textile" and

many wearers have noticed different patterns of wear. Types include neon, clear plastic, words, etc. and remains popular for

children and adults all over. Today, even in countries in the East like in India, they are a common choice for all children from above

Std. VII. Several colours don the market and even Chinese companies manufacture such shoes.[citation needed]

[edit]The Weapon

The Weapon, manufactured in many different color schemes

In 1985, Converse released "The Weapon" basketball shoe. Manufactured in many color schemes to match the kit colors of

basketball teams, it has been available in both high-top and low cut varieties. The unique aspect of this shoe is the leather

construction throughout, including the inside heel which is also heavily padded for comfort. Converse re-released "The Weapon" in

2002, 2008, and 2009, and "The Loaded Weapon" in 2003.

ey Statistics about ConverseTop Locations

Greater Boston Area (303) Greater New York City Area (106)

Headquarters Greater Boston Area

Industry Apparel & Fashion

Type Public Company

Status Operating

Company Size 500 employees

Founded 1908

Website http://www.converse.com

Common Job Titles

Designer 5%

Director 3%

Manager 3%

Account Manager 2%

Footwear Designer 2%

Top Schools Fashion Inst. of Tech. 3%

Median Age 32 years

Median Tenure 2 years

Gender Male 51%

Female 49%

Estimated based on Link

Company Perspectives:

The Company's marketing strategy is centered on the Converse All Star brand, which is positioned as the American performance brand with authentic sports heritage. The company believes that there are significant opportunities to build the brand, which commands high consumer awareness generated by reason of its 91-year history. The company's consumer research has become an integral part of its product development, advertising campaigns and in-store point of purchase materials.

Key Dates:

1908: The company is founded as Converse Rubber Co.

1917: Converse introduces the All Star, one of the world's first basketball shoes.

1929: Converse Rubber Co. falls into bankruptcy.

1972: Converse is purchased by the Eltra Corporation and acquires the footwear division of B.F. Goodrich Co.

1979: Allied Corporation purchases Converse.

1982: Allied Corporation sells Converse to a group of its senior managers.

1983: Converse stock becomes available on the NASDAQ national market.

1984: The company signs agreements with Moon-Star Chemical Corp., Mizuno Corp., and Zett Corp. to handle the manufacture, distribution, and sale of Converse footwear in Japan.

1985: The company is named the official shoe of the National Basketball Association.

1986: Converse is acquired by Interco Incorporated.

1994: Converse is spun off from Interco in November.

1999: Converse introduces the He:01 shoe.

Company History:

Converse Inc. is the largest manufacturer of athletic footwear in the United States, producing approximately 8.4 million pairs of shoes domestically in 1998. It owns and operates a manufacturing facility in Lumberton, North Carolina, where it produces the majority of its athletic originals, and leases manufacturing plants in Mission, Texas and Reynosa, Mexico. The Converse All-Star basketball shoe was the first in the athletic footwear industry, and by the early 1990s, more than 500 million pairs, in more than 56 colors and styles, had been sold in more than 90 countries worldwide. In addition, the company has diversified into varied rubber products, sports apparel, and full lines of athletic shoes for tennis, cross-training, team sports, running, walking, and children's recreation.

From Basketball Shoe Innovator to Market Leader in the Early 20th Century

The origins of Converse Inc. date back to 1908, when Marquis M. Converse founded the Converse Rubber Company in Malden, Massachusetts with a capital investment of $250,000. Converse had gained extensive retail experience as a general manager of one of Boston's largest department stores and at Beacon Falls Rubber Shoe Co. He started his own firm after Beacon was absorbed by U.S. Rubber, and, within a year of its founding, the Converse Rubber Company had integrated 350 employees into a full-production team in a new plant. By 1910, the company had expanded its plant to produce 4,000 pairs of boots and rubbers daily.

The young company experienced a dramatic increase in sales after its 1917 introduction of the Converse canvas All Star, one of the world's first basketball shoes. The game of basketball was then in its infancy, having been invented by James Naismith in 1891 at the International Young Men's Christian Association Training School. All Star's rapid success was spurred by the reputation and marketing savvy of basketball star Charles 'Chuck' H. Taylor, who joined the Converse sales force in 1921 to become the brand's first player endorser. In a town outside of Columbus, Indiana, Taylor had graduated from high school to a career in basketball. After playing for barnstorming basketball teams, including the Buffalo Germans and the Akron Firestones, Taylor joined Converse's Chicago sales office in 1921. He traveled around the country selling the shoe and promoting basketball in clinics. In 1968, a year before his death, Taylor was inducted into the Naismith Memorial Hall of Fame.

The original Converse Rubber Company soared beyond the scope of its 1908 designs until 1929 when it fell into bankruptcy. Control of the company then passed on to Mitchell B. Kaufman, who had been president of Hodgman Rubber Company since 1925. After Kaufman's untimely death a year later, his

successor, Albert Wechsler, operated the company for the Kaufman estate until 1933, when a depressed economy and reduced profits prompted yet another change in command.

The 1933 purchase of the company by the Stone family began a 39-year period of family ownership during which time Converse became a market leader. After providing protective footwear, special-purpose boots, parkas, and other equipment for the American Armed Services during World War II, the Stones concentrated on rapid growth in a civilian market. In 1946 the company's Granite State Division in New Hampshire began operating two large plants. In 1953 Converse established the Coastal Footwear Corporation in Canovanas, Puerto Rico. Converse brand lines were further expanded with the 1961 acquisition of the Tyer Rubber Company and the 1964 acquisition of the Hodgman brand of sporting goods equipment. The company also opened a new factory in Presque Isle, Maine in 1967 and purchased the Bristol manufacturing company in Rhode Island in 1969.

Expansion and Increased Competition in the 1970s

By the early 1970s, Converse had diversified beyond footwear to provide numerous industries--textile, plastic, automotive, paper, paper converting, photocopying, and leather processing--with products ranging from hockey pucks to teethguards, sports and industrial boots, and rubber compounds for specific applications. Sales were delegated to three separate divisions: Sporting Goods, Footwear, and Industrial.

The Stone family dynasty ended its reign in 1972, when Converse was purchased by the Eltra Corporation. That same year, the footwear division of B.F. Goodrich Co. was acquired, adding a modern manufacturing plant in Lumberton, North Carolina and a large distribution center in Charlotte, North Carolina, which remained the hub for Converse distribution as the company continued to expand.

By the late 1970s, factors, including increased foreign competition, soaring labor and overhead costs, and a weak domestic economy, forced the company to pare down operations, consolidate, and increase efficiency. The Hodgman line was sold, and the Malden and Andover plants were closed, followed by the Granite State Division. Sales divisions, which had traditionally been divided between sporting goods and footwear, were consolidated into one team.

Converse changed hands once again in 1979. Under the ownership of Allied Corporation, the brand would achieve unprecedented sales and profits. In 1982, however, the giant chemical conglomerate underwent a restructuring and moved out of the consumer products business. Although Converse produced 12 million pairs of sports shoes a year and had become the leader in basketball footwear, Allied put the company up for sale.

Through the combined efforts of a group of senior managers, Converse spun off from its parent to become a privately owned and operated entity. The group, led by Richard B. Loynd, president of Allied's Eltra Corporation, of which Converse was part, and John P. O'Neil, Converse president, negotiated the purchase of the Converse division from Allied for approximately $100 million. By 1983, Converse stock was available on the NASDAQ national market.

Facing the growing pressure of foreign imports, Converse moved to develop its export business to international markets. In 1984 the company signed separate agreements with Moon-Star Chemical Corp., Mizuno Corp., and Zett Corp. to handle the manufacture, distribution, and sale of Converse footwear in Japan. With the opening of an office and warehouse in Osaka in 1984 and plans to develop new shoes specifically for the Japanese market, Converse anticipated that 'within three years, it [would] be a leader in the distribution of athletic footwear in Japan,' according to company president John P. O'Neil. Between 1987 and 1988, Converse's international business increased by more than 60 percent. One driving force behind such growth was the building of direct company operations in key European, Asian, and North American locations, in addition to licensed distributors in more than 90 countries worldwide.

The Beginnings of a Full-Line Athletic Shoe Operation in the 1980s

Converse also faced competition from other domestic shoe companies. Since the early 1970s, the introduction of high-performance, leather athletic shoes strained Converse's leading position with its simple, canvas classic. By January 1986, the New York Times reported that 'Nike of Beaverton, Ore., maker of Air Jordan basketball shoes, appears to be outrunning such competitors as Reebok International Ltd., Converse Inc. and Hyde Athletic Industries.'

Consequently, Converse diversified to become a full-line athletic shoe operation. By the mid-1980s, Converse running shoes had become a popular item. Sales of tennis shoes, including the popular Jimmy Connors leather model, increased 400 percent in 1983 alone. By the 1990s, the Converse brand was associated not only with the famous Chuck Taylor All Star line, but with other fashion canvas shoes and footwear for all major sports played by all age groups.

To ensure continued development of innovative and well-designed footwear, Converse invested in an advanced technologies lab staffed by a 70-member research and development team. Upon its completion in the early 1980s, it was one of only two in-house, biomechanical footwear labs in the country. The facility included work stations equipped with powerful computers, robots, and testing systems.

In addition to designing the most effective shoes possible, Converse enhanced its reputation by sponsoring major basketball organizations and events worldwide. Converse was the first company named the official shoe of the National Basketball Association. Valid from 1995, its contract granted the company permission to use the NBA name in all advertising and promotions and to manufacture shoes with logos of NBA teams or other affiliations. Converse also supplied merchandise to cheerleaders and ball retrievers throughout the league.

Converse was also a sponsor of USA Basketball beginning with its inception in 1975. The Colorado Springs-based group was responsible for selecting national teams to represent the country in various international competitions and served as a class A member of the United States Olympic Committee. After 1977, Converse was contracted as the official shoe of USA Basketball, which agreed to 'use its best efforts to outfit players in Converse shoes,' according to Jeffrey Orridge, assistant executive director for corporate and legal affairs for the sports group, in a September 1992 article in The American Lawyer.

That agreement later caused legal conflicts, as USA Basketball team members including Michael Jordan held contracts with competing shoe companies such as Nike. Requiring players to wear Converse shoes introduced ethical and legal problems that had to be carefully resolved.

With the globalization of basketball, Converse increased its overseas contacts. In 1988 the company signed a sponsorship for the World Association of Basketball Coaches (WABC), located in Rome, Italy, and responsible for more than 50 clinics worldwide. In February 1990, the company began a five-year, seven-figure contract as the sponsor of the Federation Internationale de Basketball (FIBA). Founded in 1932 and based in Munich, Germany, FIBA included 176 member countries and approximately 119 million registered players. Its competitions included the European Championship Club Cup Final and the European Championship for both men and women.

Converse also made a presence at the Olympic Games. Though the company had provided Olympic footwear every year since 1936, in 1984 it became the first footwear supplier ever chosen to officially represent the games. The honor was not cheap: Converse paid the Los Angeles Olympic Organizing Committee (LAOCC) $4 million and spent an additional $3.5 million for national television advertising. Total promotional costs approached the $10 million mark.

New and Innovative Marketing Strategies in the 1990s

Ever since Chuck Taylor served as its first player endorser, Converse has continued to promote its footwear through high-profile sports celebrities and athletes. By 1990, the brand had contracted endorsements with more than 14 pros representing 11 different teams across the United States. In addition, company statistics showed that 21 percent of all professional basketball players wore Converse shoes.

In the case of basketball endorser Earvin 'Magic' Johnson, Converse received more publicity than it may have bargained for. In 1979 Johnson was enlisted as an official company endorser until 1994. By the late 1980s, Johnson showed dissatisfaction with the deal, which placed him in the top income echelon of Converse endorsers, but yielded less than those of other top endorsers with other leading brands. After Converse filed suit against the player for failing to comply with his long-term endorsement contract in 1987, matters were resolved temporarily.

When Johnson won the NBA's most valuable player award, Converse created a 30-second highlight piece of his best moves in the NBA tournament filmed in slow motion to the accompaniment of 'Amazing Grace.' In 1990 the brand allotted a quarter of its $40 million advertising campaign to launch its Magic Johnson footwear and apparel line. After the player announced that he had tested HIV positive in the winter of 1991, Converse aired a $1 million public service campaign called 'Magic's Athletes Against AIDS.' Yet, in 1992 old friction resumed with Johnson's public statements that Converse marketing was outdated and that he was terminating his contract before the official date. 'Converse as a company is stuck in the '60s and '70s. They think the Chuck Taylor sneaker days are still here,' Johnson told reporters in Monte Carlo after the U.S. basketball team practiced for the Olympics. 'I've been trying to get out for years.'

Despite Johnson's criticism, Converse moved into the late 1980s and early 1990s with new and innovative marketing strategies aimed at regaining lost market share. In 1985 the brand paired two rival coaches--Denny Crum from the University of Louisville Cardinals and Joe B. Hall of the University of Kentucky Wildcats--on one poster to promote the Converse brand. Other promotional strategies included free trial shoes at the 1985 Sports & Runners Expo in Boston; environmental sponsorship of the Windstar Foundation of Snowmass, Colorado; and sponsorship of the Hoop-It-Up three-on-three basketball tour, bringing the game of American streetball to 13 European cities and to youth groups at home.

In the late 1980s, Converse stressed advertising and promotional campaigns to compete with such brands as Nike, Reebok, L.A. Gear, and Keds. Even under the financial strain of its bankrupt parent, Converse garnered an effective creative team at its New York agency, Ingalls Quinn and Johnson, which developed a hit campaign featuring NBA Rookie of the Year Larry Johnson dressed up as his basketball-playing 'grandmama.' In her new, light Converses, the ad proclaimed, grandmama could blow by you 'faster than a passing thought. She'll eat point guards for lunch and pick her teeth with a power forward.'

In October 1986, Converse was acquired by Interco Incorporated, a broad-based manufacturer and retailer of consumer products and services primarily in the areas of footwear and furniture products. Citing doubt regarding Interco's future profitability, Standard & Poor's placed the company on CreditWatch. Nevertheless, Converse announced record sales for fiscal 1987, breaking the $315 million barrier and representing a 36 percent increase over 1986.

In January 1991, however, Standard & Poor's doubts proved justified. Interco filed for relief under Chapter 11 of the federal bankruptcy laws. Until it emerged from bankruptcy proceedings in the autumn of 1992, support for rapidly slipping Converse brands was limited to a dangerously low budget. Apollo Investment Fund, led by former Drexel Burnham Lambert dealmaker Leon Black, wound up with 60 percent of the company's stock.

Interco's 1992 financial restructuring, however, freed up new funds for Converse investments and marketing plans. In June of that year, Converse's advertising team at Ingalls startled Madison Avenue by pulling up stakes and moving across town to Houston, Effler & Partners Inc. The $25 million Converse account followed along one day later. Houston took off with a new generation of ads to sell new shoes. In 1993 Converse introduced its Run `N' Gun, featuring a patented React cushioning device with a combination of gas and gel built into the heel to absorb shock and provide additional maneuvering control. After some critics objected to the shoe's name as too violent, Converse changed it to Run `N' Slam.

Houston also designed a 30-second television spot featuring Kevin 'KJ' Johnson of the Phoenix Suns, with music by pop group En Vogue. The spots primarily targeted cable channels such as the Black Entertainment Network and MTV. In another 1993 award-winning campaign for the new AeroJam shoe, the agency again played off Larry Johnson's 'grandmama' theme. While grandmama performed

staggering jumps and dunks in her AeroJams, Johnson narrated: 'There was an old lady who lived in a shoe. ... And that shoe let her do things that no man could do.'

These and other aggressive promotional programs began to pay off for Interco's shoe business. Footwear group sales by Florsheim and Converse for the second quarter of 1993 were $162.1 million compared with $146.2 million in the same period of the previous year. In 1994, however, despite record revenues of $437 million, increased profits of $17.6 million, and the success of Converse's Jack Purcell racquet sports shoe, Interco Inc. decided to sell its Converse subsidiary. It was spun off in November 1994.

Diversification into the Apparel Business in 1995

Diversification followed for the once-again independent company. In 1995 it entered into a licensing deal with Shalom Children's Wear to manufacture infants' and toddlers' sporting goods apparel. It also purchased Apex One Inc., a designer and marketer of sports-related footwear and apparel that also made products under license with professional sports teams, leagues, and institutions of higher education. Following the acquisition of Apex, Converse launched an 'integrated head-to-toe apparel program' of coordinated outfits bearing the colors of top college teams. The universities of Arkansas and Kentucky were the first to take to the court in Converse garb and matching sneakers.

But the second half of 1995 unfolded in a fiasco for Converse, with layoffs, leaky shoes, and trouble at its new subsidiary. In June, it announced the cutback of 200 jobs at its Lumberton plant; in August, just 85 days after its Apex One acquisition, it decided to close down that business given unexpectedly slow orders and high costs in the face of a soft apparel market. In fact, the undercapitalized Apex, which had long had trouble making orders, no longer had the trust of most retailers, despite its affiliation with Converse. Converse eventually won $25.6 million in settlement from Apex for misrepresentation, but the episode hurt Converse, which was having financial troubles of its own--an operating loss of $8.4 million in the second quarter--and in September, it moved to indefinitely suspend operations at its Mission, Texas factory. In October and November, it laid off two more rounds of employees, and in December, just when it looked as if Converse was getting back on track with the decision to eliminate its outdoor, running, walking, tennis, and football product lines, its RAW Energy and RAW power basketball shoes literally sprang a leak, and the company was faced with the embarrassment and recall of 400,000 pairs of shoes. By year's end, Converse posted a loss of $71.7 million, compared with profits of $17.6 million in 1994.

New Management and the Retro Trend in the Late 1990s

Looking to regain momentum in 1996, Converse hired Glenn N. Rupp, former head of Wilson Sporting Goods Co., to replace Gib Ford, who retired as chief executive in that year. Rupp believed Converse should play to its strength as one of the few shoe companies with sizable domestic production facilities. Exploiting the marketability of the 'Made in the U.S.A.' label, Rupp's goal was to decrease the time it took for an order to be filled from six to only a few weeks. Together with President Michael 'Mickey' Bell, who would resign abruptly in August 1996, Rupp undertook a restructuring of the nation's No. 5 athletic shoe company.

Fortunately, for Converse, 'retro' was in, and the company undertook its biggest campaign ever aimed at recapturing the glory of its past. Its All Star 2000, a leatherized update of its traditional basketball show, which featured an old-fashioned Chuck Taylor All Star patch, began selling at a rapid clip in 1997. In the wake of this success, Converse made plans to market the Dr. J 2000 basketball shoe and the All Star 91, or Dennis Rodman shoe, in spring 1997 in time for the NBA's 50th anniversary. The company entered into deals with Rodman, Latrell Sprewell, Larry Johnson, and ABL star Theresa Edwards (40 percent of Chuck Taylor high tops were purchased by women) to help market its updated old shoe designs. In addition, Converse initiated a licensing agreement with A4 of Los Angeles to produce its Star 91 line of apparel and footwear, as well as two other men's apparel lines. The idea was to leverage the company's history as a long-time staple among professional athletes and to play up the emotional ties people had to the Converse brand.

Unfortunately, by the end of 1997, people had shifted from wearing basketball sneakers and other athletic shoes to what the industry called 'brown shoes'--work boots, hiking shoes, and casual footwear in brown or black. Converse slipped to sixth place in its industry, posting a $5 million loss despite record sales of $450 million and an increase in revenues, while throughout the sector inventories bloated and sales showed signs of going flat. In early 1998, Converse cut more jobs and changed its marketing strategy, instituting its new 'Stay true' campaign, designed to appeal to 12- to 18-year-old athletes and featuring younger players at the start of their careers. The campaign was at least in part a reaction to the embarrassment brought upon the company by Rodman and Sprewell, whose behavior on and off court was no longer something with which the company wanted to be associated. The company also continued to promote its athletic originals, its Chuck Taylor and Jack Purcell shoes.

Converse continued to struggle throughout 1998, at which point it moved to reduce its heavy reliance on its basketball category and to institute other footwear categories, such as men's and women's athletic originals and action sports. Rupp's goals for the year included marketing the retro look, expanding the supply of children's lines, pursuing a larger share of women's and girl's athletic shoes, and garnering a significant portion of sales in its new action sports category--gear for boarding and eco-training. Still the company's market share slipped further, from 3.6 percent in 1997 to 2.3 percent in 1998, and revenues for the year dropped about 30 percent to $308 million despite an increase in action sports sales.

The company's strategy for 1999 was likewise broad. With sales outside of the United States now close to 50 percent of net revenues, Converse formed Converse Canada and assigned the new division exclusive distribution and license rights for footwear, apparel, hats, and bags in Canada. It also continued to promote its athletic originals in Japan, where they were a huge success, and its skate casual shoes in Europe. Back home, it instituted a new approach to its children's product market, focusing on colorful and imaginative footwear designed specifically for children and partnering with OddzOn, Inc., marketers of Koosh sports toys. It also introduced a women's line of athletic originals in the spring of 1999.

Drawing upon the fruits of the $6.5 million, $8.8 million, and $7.7 million it spent on research and development in 1996, 1997, and 1998, respectively, Converse introduced a new shoe technology in

1999: He:01, a helium gas-cushioned shoe and the company's first technological innovation since the early 1990s. To better market its products, it partnered with pro basketball hopeful and recording artist, Master P, on a line of sneakers to complement its joint No Limit apparel, the All Star MP. It also signed a licensing agreement with Genender International design to manufacture and market a line of Converse clocks and watches. In this way, despite the ongoing layoffs and losses that continued to plague Converse into the first half 1999, the company aimed to position itself to take advantage of the anticipated improvement in industry conditions.

Principal Divisions: Converse Canada.

Principal Competitors: Adidas; Fila; Nike; L.A. Gear; Keds; Reebok.

With its roots as a popular basketball shoe worn by professionals, Converse has rebounded under NIKE as fashionable footwear and all-around cruiser for those off the court, too. Converse has sold some 750 million pairs of its classic Chuck Taylor All Star canvas basketball shoes, appealing to everyone from school kids to clothing designers. It licenses its name to sports apparel makers. Converse makes products under the names One Star and Jack Purcell that it sells through retailers such as Target and licensees in some 160 countries and its more than 40 stores. Converse operates as a separate unit from its parent's competing sports brands, reining in the kitsch value of Converse's vintage Chuck Taylor brand.

Converse Inc.

Converse, Inc., established in 1908 and based in North Andover, Massachusetts, has built a reputation as “America’s Original Sports Company”™ and has been associated with a rich heritage of legendary shoes such as the Chuck Taylor® All Star® shoe, the Jack Purcell® shoe and the One Star® shoe. Today, Converse offers a diverse portfolio including premium lifestyle men's and women's footwear and apparel. Converse product is sold globally by retailers in over 160 countries and through more than 50 company-owned retail locations. Converse realized $915 million in sales in fiscal 2009. For more information on Converse and the company's latest collections, please visit www.converse.com.

OVERVIEW

Converse, Inc. manufactures athletic shoes and sells them at its 31 company-operated retail stores. Converse led the athletic footwear market for many years with the Chuck Taylor All Star basketball shoe, but when the company encountered brisk competition

in the 1980s and 1990s, its sales dropped below those of companies such as Nike, Reebok, and Fila. Nonetheless, Converse still ranks among the six leading athletic footwear producers in the United States. Converse remains well below Nike and Reebok, which in 1997 held 47 and 15 percent of the U.S. athletic shoe market, respectively. In the 1990s Converse Inc.'s revenues fluctuated in part because of the fickle nature of the athletic shoe market, much of which is made up of male adolescents under age 17. In 1997 sales totalled a record $450.2 million, a 28.9 percent increase from 1996. The company registered sales of $349.0 million in 1996, a 14 percent increase over 1995 revenues of $300.0 million. Converse also performed well in 1994 with revenues of $437.0, a 15 percent climb from sales of about $371.0 million in 1993. To remain competitive and increase its share of the sportswear market, Converse plans to continue introducing new shoe lines fortified by endorsements from professional athletes and to enhance its athletic apparel presence.

COMPANY FINANCES

Converse's 1997 sales totalled $450.2 million, a 28.9 percent increase from 1996. Domestic sales represented63.0 percent of the company's net sales. Non-U.S. net sales accounted for 36.7 percent of total revenues in 1997, compared to 44.4 percent in 1996.

ANALYSTS' OPINIONS

Industry observers expressed mixed feelings about Converse Inc.'s efforts to hasten its turnaround. Some maintain that changing the company logo to the Chuck Taylor patch will not inspire the double-digit growth Converse expects. According to Mark Tedeschi in Sporting Goods Business, analysts believe the company's reliance on Dennis Rodman's endorsement is poor, since the endorsement may fail to drum up substantial new sales because of waning consumer interest in Rodman and competition from Nike's Jordan collection. Even though many observers feel the company lacks a broad enough product focus, they contend that Converse will experience new growth, but at a moderate rate.

HISTORY

In 1908 Marquis M. Converse established Converse Inc.'s ancestor, Converse Rubber Co., in Malden, Massachusetts. After two years of operation, Converse Rubber generated an average of 4,000 boots per day. In 1917 the company launched its most popular shoe of all time, the All Star basketball shoe. The All Star led the company to popularity and prosperity, especially when it received the endorsement of basketball player Chuck Taylor in 1921.

However, in 1929 financial troubles hit Converse and the company went bankrupt. Mitchell B. Kaufman took over Converse in 1929 and ran it until he died just a year later. At that point, Albert Welchsler became the company's owner, but by 1933 Welchsler could no longer afford to run the company, which had experienced poor profits due to the Great Depression. In 1933 the Stone family bought Converse and operated it for 39 years, watching it grow into a major footwear contender. During World War II Converse supplied the U.S. military with footwear and outerwear. After the war Converse shifted its focus back to the consumer market, opening two new plants for large scale production.

In the 1970s Converse began to diversify, adding hockey pucks, boots, and teethguards to its repertoire of products. Converse also created three sales divisions—sporting goods, footwear, and industrial products—to oversee its assorted products. In 1972 Converse changed hands again when Eltra Corporation purchased the company from the Stone family. Eltra held on to the company through most of the 1970s as Converse expanded and acquired other companies. However, when the economy soured in the late 1970s, Eltra's parent company, Allied Corporation, took control of Converse. In 1982 Allied abandoned the consumer market and sought a buyer for Converse, which by then was the leading producer of basketball shoes, manufacturing 12 million pairs of shoes a year. Executives at Eltra eventually bought Converse from Allied for $100 million and took the company public in 1983.

The company's next owner, Interco, acquired Converse in 1986 and sales rose to $315 million the following year. However, its new parent company suffered from a series of financial problems and filed for bankruptcy in 1991. Converse remained an Interco subsidiary until November 1994 when the ailing company sold its shares of Converse, spinning off the shoe maker as an independent company.

STRATEGY

From its entrance into the athletic shoe market, Converse has used endorsements of famous athletes to promote its products. Basketball player Chuck Taylor promoted the company in the 1920s and 1930s, and basketball stars such as Earvin "Magic" Johnson and Dennis Rodman carried the company's banner in the 1990s. Converse has sought to diversify its footwear offerings and expand its product line to include more athletic apparel. In 1996, apparel represented $9 million of the company's total sales, and the company projected a 10-percent increase for apparel in 1997.

FAST FACTS: About Converse, Inc.

Ownership: Converse, Inc. is a publicly owned company traded on the New York Stock Exchange.

Ticker symbol: CVE

Officers: Glenn N. Rupp, Chmn. & CEO, 53, 1997 base salary $476,538; Donald J. Camacho, Sr. VP & CFO, 47, 1997 base salary $192,837; James E. Solomon, Sr. VP Marketing, 42, 1997 base salary $285,577

Employees: 2,249

Principal Subsidiary Companies: Converse has 17 international subsidiaries in France, Netherlands, Belgium, Germany, Portugal, Spain, Italy, Japan, Scandinavia, Mexico, Brazil, and Barbados.

Chief Competitors: Competition in the athletic footwear market considers fashion, price, quality, performance, and durability. Some primary competitors include: Reebok International, Inc.; adidas AG; and Nike Inc.

In the mid-1990s, Converse removed its star and chevron logo of the 1980s and 1990s, replacing it with the Chuck Taylor patch. In 1996 Converse introduced a new line of basketball shoes, the All Star 2000, as part of its campaign to increase new product offerings. Furthermore, Converse eliminated its baseball and football shoes and tightened its focus on basketball, cross-training, leisure, and children's shoes. Converse also renovated a North Carolina production plant so it could produce more shoes in the United States, thereby expediting the company's shoe deliveries.

INFLUENCES

Because of the initial success of the All Star shoes, Converse relied on them to drive its sales. This strategy helped the company become the leading basketball-footwear provider for many years. Eventually this success eclipsed the company's vision. Consequently, Converse failed to continue developing innovative shoes as competition in the athletic footwear market started to intensify in the 1970s. Companies such as Nike and Reebok introduced leather performance shoes (previous models had been canvas), which received a strong response from both consumers and players. However, in the 1980s Converse followed this trend and launched numerous new athletic shoe styles, boosting its sales by 400 percent.

Converse Inc. also learned some lessons from its disastrous 1995 acquisition of Apex One Inc., a producer of licensed athletic apparel from professional sports teams. Converse quickly attempted to increase its presence in the apparel market by

purchasing the nearly bankrupt Apex One, but Apex had fallen so far behind in delivering products to retailers that the retailers scaled back business with Apex or severed their connections completely. As a result, Converse lost $41 million from the purchase and closed the apparel manufacturer just three months after buying it.

CURRENT TRENDS

With the 1997 emergence of two professional women's basketball leagues as part of the Women's Professional Basketball Association (WNBA), athletic-shoe producers expanded their basketball shoe lines to target women for what some analysts predicted may be the fastest growing product area. As of 1997, only Nike and Reebok sold women's basketball shoes, but others (including Converse) planned to introduce them in 1998.

PRODUCTS

Part of Converse Inc.'s plan to improve its sales included the introduction of new high-performance and athlete-endorsed shoes. In 1996 Converse rolled out its All Star 2000 shoes, which proved popular and helped the company improve its sales. To compete with Nike's Air Jordan concept, Converse decided to launch a series of four shoes designed around the styles of Dennis Rodman. The first style released featured splashy colors, while the remaining were planned to be more conservative, given the lukewarm response to the first. In addition, Converse continued to manufacture and market its classic Chuck Taylor All Star canvas athletic shoe, which sold more than 560 million pairs since its introduction.

CHRONOLOGY: Key Dates for Converse, Inc.

1908:

Marquis M. Converse establishes the Converse Rubber Company

1917:

Converse introduces the Converse canvas All Star, one of the first basketball shoes

1921:

Charles "Chuck" Taylor becomes the brand's first endorser

1929:

Converse Rubber Company files for bankruptcy

1933:

The Stone family purchases Converse

1953:

Converse establishes the Coastal Footwear Corporation in Puerto Rico

1972:

Eltra Corporation purchases Converse ending the Stone Family's 39 years of ownership

1977:

Converse is contracted as the official shoe of USA Basketball

1979:

Allied Corporation takes over control of Converse from Eltra

1982:

Allied abandons the consumer market and seeks a buyer for Converse

1983:

Eltra buys back Converse and takes it public

1986:

Interco Incorporated acquires Converse

1994:

Interco spins off Converse and it becomes an independent public company

1996:

Converse introduces the All Star 2000 in an effort to increase new product offerings

Recently Converse used its tag and marketing statement "Stay True." The reasoning behind this slogan is that athletes should "stay true" to themselves, be proud of their success, and appreciate those who have helped them succeed.

CORPORATE CITIZENSHIP

Federal, state, and local laws monitor companies regarding possible environmental contamination, such as waste disposal and emission of various materials. The main materials used in Converse's shoes are canvas, linen, and rubber. The company believes any negative environmental claims they may incur will not affect its business.

Converse maintains a state-of-the-art biomechanics research laboratory that supports an ongoing search for new technology and enhancements to shoes geared for specific sports. The company's patented REACT shock absorption technology acts as a cushion in certain areas of the shoes' construction to protect athletes' feet from high impact.

From 1936 to 1984 Converse sponsored the Summer Olympic Games and provided footwear for the athletes. In addition, Converse has funded an abundance of basketball organizations and events around the world. The sportswear company supported USA Basketball, which organizes basketball teams to represent the United States in worldwide basketball tournaments. Converse also has sponsored international basketball organizations including the World Association of Basketball Coaches and Federation Internationale de Basketball, an organization composed of members from 176 countries.

GLOBAL PRESENCE

Converse products are marketed in 90 countries outside the United States. Foreign sales in 1997 were 36.7 percent of total earnings, compared with 44.4 percent in 1996. Although the majority of the company's footwear is sourced from various Far East factories, most of the athletic originals products are manufactured domestically. In 1997, 16 manufacturers in China, Taiwan, Macau, Vietnam, and the Philippines sold over 13.3 million pairs of shoes to Converse.

EMPLOYMENT

Converse has a 38-member sales force that markets its footwear through approximately 4,200 active retail accounts. In 1997 domestic sales represented 63 percent of the company's net sales. The 13 account executives who service national and regional accounts are paid salaries plus bonuses. The company has a non-contributory pension plan for domestic salaried employees based on years of service and final annual compensation. Hourly employees also have a non-contributory defined contribution plan. Converse also sponsors a savings plan and offers stock options to key employees. In addition, the company has a Non-Employee Director's Plan, which encourages non-employees of outstanding ability to enter and remain with the company as directors.

THESE SHOES WERE MADE FOR BASKETBALL

One of Converse, Inc.'s greatest accomplishments came early in its history, in 1917. That year brought Converse its most successful product, its trademark All Star basketball shoes. At that point, basketball was still in an embryonic stage, invented fewer than 30 years earlier in 1891 by James Naismith at the International YMCA Training School.

Nonetheless, with the endorsement and marketing abilities of basketball star Charles "Chuck" Taylor, the shoes' success soared to great heights. Taylor joined the company in 1921 and his signature was added to the shoe in 1923, helping launch Converse All Stars as the standard for basketball players for many years. Since no professional teams had been established, Taylor built his reputation as a basketball player in high school and adult leagues. While working for Converse, Taylor traveled around the country, hosting basketball clinics, meeting coaches, and promoting his signature Chuck Taylor All Stars.

Eventually, Taylor was inducted into the Naismith Memorial Hall of Fame. The shoe has a kind of "hall of fame" status as well—the Chuck Taylor All Star canvas athletic shoe has sold over 560 million pairs since its introduction.