Converse (pronounced /ˈkɒnvərs/) is an American shoe company that has been making shoes since the early 20th century.


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 was not 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"), the first all-African American professional basketball team.

With its roots as a popular basketball shoe worn by professionals, Converse has morphed under NIKE into a fashionable footwear firm 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 school kids to clothing designers. It licenses its name to makers of sports apparel, as well. Converse also manufactures products under the One Star and Jack Purcell names that it sells through about 50 of its own stores as well as through retailers the likes of Target. Converse operates as a separate unit from NIKE's competing sports brands, reining in the kitsch value of Converse's vintage Chuck Taylor brand.

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.

Statistics:
Public Company
Incorporated: 1908 as Converse Rubber Company
Employees: 2,658
Sales: $308 million (1998)
Stock Exchanges: New York
Ticker Symbol: CVE
NAIC: 31621 Footwear Manufacturing

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.

Key People
• CEO: Michael Spillane
• Media Relations: Keith Gulla
• Chief Marketing Officer: Geoff Cottrill

Address:
One Fordham Road
North Reading, Massachusetts 01864-2619
U.S.A.
 
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