How a $30 billion giant resisted killing the goose, and in the process uncovered a golden egg.
Chuck Taylors were once considered a performance shoe, worn by Wilt Chamberlin in 1963, when he scored 100 points in a single game. Today, they are an anti-fashion, anti-establishment statement.
Nike purchased a bankrupt Converse in 2003, for $305 million. At the time Converse was generating annual revenues of $205 million and Nike's sales were over $10 billion.
Last year, Converse sold 270,000 pairs of Chuck Taylor sneakers... every day. That's 100 million pairs of "Chucks."
In their most recent fiscal year, ending May 31, 2015, Converse's revenue was nearly $2 billion, a 10x growth over 10 years. At $517 million, Converse now represents over 12% of Nike's total operating profit, and Chuck Taylor sneakers are responsible for most of Converse's sales and profit.
Kudos to Converse CEO, Jim Calhoun and his team.
These statistics, and more, were published in The New York Times this weekend in a story of "enduring American business" by Jeff Sommer, "Treading Carefully to Update a Well-Worn Sneaker Brand."
The "New" Chuck Taylor II, with Lunarlon cushioned insoles
Where the rubber, and canvas, meets the road.
Nike just introduced an "updated" Chuck Taylor sneaker with a new insole. It is a subtle, and cautious, "tweak" to the original sneaker launched in 1917. It looks nearly identical to the classic 1934 canvas version.
Chuck Taylor, All-Star Salesman & Basketball Coach
Apelles, a famous ancient Greek artist, in response to a shoemaker who criticized his painting, is credited with saying, "Ne ultra crepidam judicaret." Literally translated as, "Shoemaker, do not rise beyond the sandals." Today we know the phrase as, "Stick to your last" or "stick to the things you know something about." (A "last "being the form upon which a shoe is built). Nike and Converse understand this aphorism quite well.
Nike has managed to leverage their marketing muscle without alienating Chuck Taylor's core customers, a formidable feat, and a valuable lesson.
(c) David J. Katz, New York City