WEBVTT - A Converse Conversation 0:00:04.360 --> 0:00:08.560 Converse, not just Chuck Taylor's, but certainly best known for them. 0:00:08.640 --> 0:00:12.479 These all stars were once the US ideal of athletic Shoe, 0:00:12.680 --> 0:00:15.880 but after close to fifty years of success, these kicks 0:00:15.920 --> 0:00:18.640 seemed like they might kick the bucket. Find out how 0:00:18.800 --> 0:00:22.239 Chuck's chucked the label of athletic Shoe and strolled their 0:00:22.280 --> 0:00:35.760 way back into prominence. This is Converse on the brink, everybody. 0:00:35.800 --> 0:00:39.000 I'm Jonathan Strickland and I'm Ariel Casting, and we're going 0:00:39.040 --> 0:00:43.839 to talk about shoes today. Yes, talking about Converse. I 0:00:43.920 --> 0:00:46.959 learned a whole lot about this company as we were 0:00:46.960 --> 0:00:50.960 doing research, and uh boy, howdy, there were a few 0:00:51.520 --> 0:00:54.760 brink moments in the history of this company. There certainly were. 0:00:55.200 --> 0:00:57.680 But before we get to those, yeah, I'm going to 0:00:57.760 --> 0:01:00.840 say that I fell in love with Converse way back 0:01:00.960 --> 0:01:03.800 when Punky Brewster first came out. So was it like 0:01:03.920 --> 0:01:06.800 right around the time she got stuck in that refrigerator? Hey, 0:01:06.959 --> 0:01:11.919 listen to you, um, but I never owned enough Converse, 0:01:12.160 --> 0:01:14.600 and I do own a pair currently to be able 0:01:14.640 --> 0:01:19.520 to wear two mismatched ones, right. I have owned Converse 0:01:19.600 --> 0:01:22.200 in the past. I remember some some Converse high tops 0:01:22.280 --> 0:01:25.600 back in the day, but It has been a while 0:01:25.760 --> 0:01:29.240 since I've owned any but those. Those were very prominent 0:01:29.280 --> 0:01:32.800 shoes for a while. But as it turns out, the 0:01:32.840 --> 0:01:37.560 company has had a pretty rocky history and uh it, 0:01:37.840 --> 0:01:40.640 once they found their footing, things were going pretty darn 0:01:40.720 --> 0:01:45.360 well for a while. Not it wasn't on purpose, but 0:01:45.440 --> 0:01:47.920 it will happen. But as it turns out, there were 0:01:48.120 --> 0:01:51.800 quite a few times where things could have gone very poorly, 0:01:52.040 --> 0:01:55.680 and it's actually kind of miraculous that they're still around 0:01:55.760 --> 0:01:59.200 in some ways. It is it is. Let's talk about 0:01:59.320 --> 0:02:02.280 the foul ending of the company, give a quick rundown 0:02:02.320 --> 0:02:05.800 of its history leading up to the true brink moment, 0:02:05.960 --> 0:02:08.120 which which will happen a little later in this episode 0:02:08.120 --> 0:02:10.760 than we typically do, but it's because there was a 0:02:10.800 --> 0:02:13.120 lot of interesting stuff that happened leading up to I 0:02:13.160 --> 0:02:15.120 feel like we kind of can't skip the stuff leading 0:02:15.200 --> 0:02:18.160 up to it. So to start off, and don't worry, 0:02:18.160 --> 0:02:20.160 we will not go every single year from the time 0:02:20.200 --> 0:02:22.920 they started their company in nineteen o eight, but we 0:02:22.960 --> 0:02:26.400 will hit some key points. So Converse started in nineteen 0:02:26.400 --> 0:02:29.320 o eight as the Converse Rubbers Shoe Company. It was 0:02:29.960 --> 0:02:35.280 started in Malden, Massachusetts by Marquis Mills converse. What a name, Yes, 0:02:35.600 --> 0:02:38.440 Marquis Mills conversation. Well, he was either going to do 0:02:38.520 --> 0:02:42.840 shoes or General Mills cereals, but no, he he started 0:02:42.840 --> 0:02:46.160 off by working in a footwear manufacturing firm. He rose 0:02:46.200 --> 0:02:48.680 to the level of manager there before he decided to 0:02:48.760 --> 0:02:51.239 found his own company, and he was able to secure 0:02:51.480 --> 0:02:54.480 a capital investment of two d fifty thousand dollars. And 0:02:54.480 --> 0:02:57.440 I went ahead and did the conversion because I was curious, 0:02:58.080 --> 0:03:00.560 if it's a quarter of a million dollars in nineteen eight, 0:03:00.560 --> 0:03:02.440 how much would it be in It'd be nearly seven 0:03:02.440 --> 0:03:06.840 million dollars today. That's a pretty hefty investment. That is 0:03:07.000 --> 0:03:11.240 especially since when they started they were only making shoes seasonally, 0:03:11.480 --> 0:03:14.400 so they were mainly making rubber work shoes and galoshes 0:03:14.440 --> 0:03:17.639 and winterized rubber sols and things like that, which meant 0:03:17.639 --> 0:03:19.680 they weren't keeping their company open year round. They weren't 0:03:19.760 --> 0:03:23.480 keeping their staff year round, right, And then they eventually 0:03:23.520 --> 0:03:25.920 realized that, hey, if we are able to make more 0:03:26.120 --> 0:03:31.359 use out of our facility, then it'll pay itself off faster. Right. 0:03:31.840 --> 0:03:34.800 It's sort of the same argument that Walt Disney had 0:03:35.480 --> 0:03:38.760 when he was looking at different places to put the 0:03:38.840 --> 0:03:43.040 first theme park, the first Disney amusement park, because he 0:03:43.080 --> 0:03:46.200 wanted to eventually find a place that would be able 0:03:46.240 --> 0:03:48.760 to be open year round and not just be seasonal, 0:03:48.760 --> 0:03:51.760 because otherwise, for like half the year, your your investment 0:03:51.800 --> 0:03:56.200 isn't doing anything. Yeah. So he starts thinking about ways 0:03:56.280 --> 0:04:01.400 that perhaps they can diversify, not just do you know, galoshes. Yeah, 0:04:01.440 --> 0:04:04.520 So they look at other shoes that need rubber souls, 0:04:04.600 --> 0:04:07.920 and that turns out to be athletic shoes. Yeah. And 0:04:07.960 --> 0:04:11.000 it's funny because I like that you have here. Netball 0:04:11.200 --> 0:04:13.400 was one of the types of shoes as sort of 0:04:13.600 --> 0:04:18.560 a precursor to basketball. Yes, and tennis and football, but 0:04:18.600 --> 0:04:22.960 I'm not sure if that was soccer soccer American football. 0:04:23.320 --> 0:04:25.920 There were basketball shoes at the time, but Spalding mainly 0:04:25.920 --> 0:04:29.440 had that market. So some people will point to Converse 0:04:29.600 --> 0:04:33.080 and call it like the first basketball shoe company, which 0:04:33.120 --> 0:04:36.400 is not entirely accurate. They were not the first, but 0:04:36.520 --> 0:04:41.680 they would become inextricably paired with basketball, as it turns out, 0:04:42.000 --> 0:04:45.360 and basketball was starting to gain popularity right around this time. 0:04:45.400 --> 0:04:48.440 It had only recently been invented. It was a pretty 0:04:48.440 --> 0:04:52.400 new sport and as it was getting more popular, Converse 0:04:52.839 --> 0:04:54.800 that he said, you know, we should probably make a 0:04:54.839 --> 0:04:58.600 shoe that's specifically tailored for that kind of sport. And 0:04:58.680 --> 0:05:00.600 so they did a lot of research and in nineteen 0:05:00.720 --> 0:05:04.640 seventeen they came out with the Converse All Star Basketball shoe. Yeah, 0:05:04.720 --> 0:05:07.760 that was their famous shoe brand. And the first shoe 0:05:07.839 --> 0:05:12.880 was very sexy. It was brown with black trim. Yeah. Woa. 0:05:14.080 --> 0:05:17.120 But but they ended up increasing the options you could 0:05:17.120 --> 0:05:20.279 have pretty shortly, right, Yes, they did. By the nineteen twenties, 0:05:20.320 --> 0:05:24.120 you could also get black, canvas and leather versions. So 0:05:24.480 --> 0:05:28.599 this would become the first mass produced basketball shoe in 0:05:28.640 --> 0:05:31.800 North America. Whereas Spalding had been doing these and kind 0:05:31.800 --> 0:05:35.160 of smaller batches, Converse was getting ready to do them 0:05:35.279 --> 0:05:39.039 in larger numbers. And it took a little while for 0:05:39.120 --> 0:05:42.640 the shoes to start getting gaining popularity, but after a 0:05:42.680 --> 0:05:46.880 while you could say it was a runaway success. Oh goodness, Jonathan. 0:05:46.960 --> 0:05:50.880 By twenty they were selling about twenty thousand pairs a day. 0:05:51.080 --> 0:05:53.599 That's a lot, Yes, that is a lot of shoes. 0:05:53.920 --> 0:05:58.240 And uh, then we get the famous name Chuck Taylor. 0:05:58.800 --> 0:06:01.720 Taylor was an actual person. He was He was a 0:06:01.760 --> 0:06:06.080 famous basketball player, and in he decided he liked the 0:06:06.120 --> 0:06:09.720 shoes so much that he wanted a job with Converse. 0:06:10.200 --> 0:06:13.479 It's kind of funny because I've read different stories involving 0:06:13.520 --> 0:06:15.560 the way he joined the company, and so it's like 0:06:15.960 --> 0:06:18.599 he wanted to visit this company after trying their shoes. 0:06:19.080 --> 0:06:23.279 He had played for for teams, storied teams, historic teams 0:06:23.320 --> 0:06:27.599 like the Buffalo Germans and the Acron Firestones. Acron Firestones 0:06:28.400 --> 0:06:30.320 in some of the versions of the story I read, 0:06:30.400 --> 0:06:35.000 he walked in to complain about how his feet hurt. Interesting, 0:06:35.160 --> 0:06:38.239 but then the company offered him a job of being 0:06:38.279 --> 0:06:40.840 a sort of marketing guy in salesman, and he picked 0:06:40.920 --> 0:06:43.960 up on it. And as it turns out, Chuck Taylor 0:06:44.279 --> 0:06:47.000 was a heck of a salesman. He would travel around 0:06:47.120 --> 0:06:51.360 the country hosting basketball clinics and and pushing the shoes. 0:06:51.800 --> 0:06:54.279 He drove around in a white Cadillac and his trunk 0:06:54.360 --> 0:06:56.360 was full of Converse All Stars. And it was kind 0:06:56.360 --> 0:06:59.799 of neat because he would hold these sort of basketball 0:07:00.000 --> 0:07:04.800 in x essentially, you know, these almost exhibitions, and they 0:07:04.839 --> 0:07:07.880 were incredibly popular, so they would get big crowds to 0:07:07.960 --> 0:07:11.080 watch these pickup games or what appeared to be pickup games, 0:07:11.600 --> 0:07:14.040 and the whole time he's talking about how the shoes 0:07:14.080 --> 0:07:17.360 are really helping with performance, and you know, it's kind 0:07:17.360 --> 0:07:20.040 of one of those things where the implication is, if 0:07:20.080 --> 0:07:22.880 you want to be a really good player, then you 0:07:23.000 --> 0:07:25.320 just need a pair of these shoes, and that's that's 0:07:25.320 --> 0:07:29.080 what you need to complete your abilities. And that marketing 0:07:29.120 --> 0:07:32.960 message worked like gangbusters. It did. He also at the 0:07:33.040 --> 0:07:35.320 time was helping fine tune the shoes so that they 0:07:35.400 --> 0:07:39.320 had better performance. Now, part of the problem Converse ran 0:07:39.400 --> 0:07:41.960 into early on the company, not the man, but the 0:07:42.000 --> 0:07:46.559 company was that it was growing very quickly at this point. 0:07:46.720 --> 0:07:49.520 And we've seen this happen a few times with different 0:07:49.560 --> 0:07:53.800 companies where they grow so fast that they don't build 0:07:53.800 --> 0:07:58.760 out the support structure two maintain that growth, and it 0:07:58.800 --> 0:08:01.520 just gets out of control. That was starting to happen 0:08:01.560 --> 0:08:06.680 to Converse, and in nineteen nine they actually went into bankruptcy. 0:08:06.760 --> 0:08:09.160 So this could have been our brink moment here that 0:08:09.200 --> 0:08:12.040 they went bankrupt just a few years after being founded. 0:08:12.400 --> 0:08:15.720 At that time, the president of a rival rubber company 0:08:15.800 --> 0:08:18.800 named Mitchell B. Kaufman, that is, the president, not the 0:08:18.840 --> 0:08:21.440 name of the rubber company, came in and he took 0:08:21.440 --> 0:08:24.679 control of Converse since it was bankrupt at that point. 0:08:25.200 --> 0:08:28.840 But he passed away in nineteen thirty, so one year 0:08:28.880 --> 0:08:33.319 after he buys the company, he dies, and Albert Wexler 0:08:33.760 --> 0:08:37.160 was the sort of the executor of the estate, and 0:08:37.200 --> 0:08:40.200 so he oversaw the care of the company for the 0:08:40.320 --> 0:08:44.800 time being. So Marquee is out, Wexler's overseeing the company. 0:08:44.920 --> 0:08:47.439 Chuck Taylor still very much a part of the company, 0:08:47.679 --> 0:08:50.400 so much in fact, that in ninety two they added 0:08:50.440 --> 0:08:53.080 his name to the little support of ankle patch on 0:08:53.120 --> 0:08:57.200 the high tops, um they're not on the tops, and 0:08:57.200 --> 0:08:59.120 they put his name around the All Star and they 0:08:59.160 --> 0:09:01.280 also added eventually Nilot's a year, But I don't think 0:09:01.320 --> 0:09:03.560 that was an honor of Chuck Taylor. No, But that's 0:09:03.640 --> 0:09:07.000 where we started referring to Converse shoes as Chuck Taylor. 0:09:07.640 --> 0:09:12.280 In nineteen thirty three, you had the Stone family move in. 0:09:12.480 --> 0:09:14.520 So one of the other elements you're gonna hear a 0:09:14.600 --> 0:09:19.199 lot about in this podcast is how Converse was traded 0:09:19.240 --> 0:09:21.440 around a lot like there were a lot of different 0:09:21.559 --> 0:09:24.640 entities that owned Converse, but one group that owned it 0:09:24.760 --> 0:09:27.520 for a really long time was the Stone family. It 0:09:27.640 --> 0:09:32.920 was Joseph, Harry Kay and Dewey D. Stone. They bought 0:09:32.960 --> 0:09:35.199 the Converse Rubber Company and they would hold onto it 0:09:35.320 --> 0:09:38.640 for thirty nine years. When they were done, like when 0:09:38.679 --> 0:09:42.720 they got out of it. It was Joseph's son, Stephen Stone, 0:09:42.840 --> 0:09:45.600 who was in charge of the company. And under the Stones, 0:09:45.679 --> 0:09:48.319 Converse would see its greatest success. It would see its 0:09:48.640 --> 0:09:52.120 its biggest climb in the domination of the athletic shoe 0:09:52.160 --> 0:09:54.520 market in the United States, and most of that was 0:09:54.679 --> 0:09:58.360 due to Chuck Taylor's brilliant marketing, holding those basketball clinics 0:09:58.400 --> 0:10:00.600 and convincing all those kids you to have a pair 0:10:00.640 --> 0:10:05.240 of these shoes. So after the Stones take over Converse 0:10:05.720 --> 0:10:08.040 in six they come out with a white high top 0:10:08.160 --> 0:10:11.680 version of the shoe, which became the official Olympic basketball 0:10:11.720 --> 0:10:14.520 team shoe. It was the first year that basketball was 0:10:14.559 --> 0:10:17.320 in the Olympics, I believe, and the US team were 0:10:17.440 --> 0:10:21.000 wearing Converse and they took the gold and the Converse 0:10:21.080 --> 0:10:22.959 had little red and blue trim on it. So I 0:10:23.000 --> 0:10:26.000 would imagine that that could not have been a bad 0:10:26.120 --> 0:10:30.320 marketing at all, being an Olympic winner by our shoes. 0:10:30.520 --> 0:10:33.000 And then beyond that, in World War Two, Chuck Taylor 0:10:33.080 --> 0:10:35.800 served as an Air Force captain, and when he was there, 0:10:35.920 --> 0:10:38.360 he was coaching basketball for the teams and the troops 0:10:39.120 --> 0:10:41.679 and pushing the shoes, and so the shoes became the 0:10:41.720 --> 0:10:45.040 official shoe of the U. S. Armed Forces, official sneaker. 0:10:45.280 --> 0:10:47.960 And we've talked about in the past how companies were 0:10:48.000 --> 0:10:52.760 able to to survive by landing lucrative military contracts. Harley 0:10:52.840 --> 0:10:57.000 Davidson was like that as well. So then we get 0:10:57.400 --> 0:10:59.800 the black and white high top in nineteen forty nine, 0:11:00.320 --> 0:11:03.319 which was one of those shoes that people just associate 0:11:03.400 --> 0:11:05.920 with Converse. It's one of those that really kind of 0:11:05.960 --> 0:11:10.719 defined the look. It was really starting to become I 0:11:10.800 --> 0:11:12.920 guess saying starting to become is the wrong way of 0:11:12.960 --> 0:11:16.040 putting it. It had established itself as the dominant athletic 0:11:16.120 --> 0:11:18.360 shoe at that point. Yeah, basketball teams are starting to 0:11:18.440 --> 0:11:21.960 incorporate them as a part of the uniform. In seven, 0:11:22.080 --> 0:11:24.520 there was a low top Oxford version that came out, 0:11:25.120 --> 0:11:28.079 and by that time Converse had the market share. And 0:11:28.200 --> 0:11:30.599 then by nineteen sixties and basketball teams were asking for 0:11:30.720 --> 0:11:33.440 matching colors to their uniforms for their shoes. And then 0:11:33.679 --> 0:11:36.079 uh in the late sixties you had a pair of 0:11:36.200 --> 0:11:39.679 things happened, one great and one bad. The great one 0:11:39.800 --> 0:11:43.520 was that Chuck was invited into the Basketball Hall of 0:11:43.559 --> 0:11:46.719 Fame for being an ambassador of basketball. But then the 0:11:46.800 --> 0:11:50.559 following year, in nineteen sixty nine, he passed away. This 0:11:51.360 --> 0:11:53.800 is sort of where Converse had hit a peak and 0:11:54.080 --> 0:11:57.480 then it was going to struggle shortly thereafter. Though we're 0:11:57.559 --> 0:12:00.719 not quite at the point that I would call the 0:12:00.880 --> 0:12:03.600 real brink yet. We're still going to get to them now, 0:12:03.720 --> 0:12:05.920 but we're getting to the decline. This is a good 0:12:05.960 --> 0:12:09.800 point before we start that precipitous drop, that we take 0:12:09.840 --> 0:12:21.200 a break and thank our sponsor. Okay, So now we're 0:12:21.280 --> 0:12:24.560 hitting the nineteen seventies and a lot of rival sneaker 0:12:24.600 --> 0:12:28.520 companies are coming out. Running is becoming increasingly more popular, 0:12:28.920 --> 0:12:30.760 and so all of these other companies are trying to 0:12:30.880 --> 0:12:34.280 compete with Converse, and they're doing so by making more 0:12:34.320 --> 0:12:37.800 specialized shoes for running, adding more technology things like pumps 0:12:37.840 --> 0:12:40.240 and springs and cushions into their shoes. I've got Nike 0:12:40.440 --> 0:12:43.120 and Nudidas and Puma who are all starting to edge 0:12:43.160 --> 0:12:45.760 in on Converses market share, and then later you would 0:12:45.760 --> 0:12:48.959 get another company like Reebok also joining in that. I 0:12:49.280 --> 0:12:54.240 remember this era. I remember the era of ridiculous like 0:12:54.880 --> 0:12:58.280 gimmicks with shoes that were supposed to make things like 0:12:58.520 --> 0:13:00.959 high performance shoes. It was a pretty long era. It 0:13:01.160 --> 0:13:03.520 went well into the eighties, well into the no I 0:13:03.559 --> 0:13:06.080 remember the pump the pump shoes where you would pump 0:13:06.200 --> 0:13:07.520 up the air and your shoes to give you that 0:13:07.640 --> 0:13:10.640 big bounce, and to the point where I was all 0:13:10.679 --> 0:13:12.880 the kids in school and I was going to school 0:13:12.880 --> 0:13:14.720 were convinced if you pumped them up enough, you would 0:13:14.760 --> 0:13:18.679 just explode yourself off into the stratosphere, which I never 0:13:18.760 --> 0:13:23.200 actually managed to do. I'm sorry, I'll fly one day. Well, 0:13:23.280 --> 0:13:28.280 these ridiculously technological shoes were really comfortable, and so people 0:13:28.320 --> 0:13:31.280 started wearing them also as their casual shoes. And while 0:13:31.280 --> 0:13:33.959 all these other shoe companies are trying to make the 0:13:34.080 --> 0:13:37.320 latest and greatest to appeal to all of these runners 0:13:37.440 --> 0:13:39.960 and in this new market that's growing, Converse she said, 0:13:40.160 --> 0:13:43.840 we're going to keep doing what we're doing. Yeah. And meanwhile, 0:13:44.520 --> 0:13:48.439 you started to see the core audience for Converse, the 0:13:48.480 --> 0:13:52.920 core customers for Converse, start to drift away from the brand. 0:13:53.120 --> 0:13:57.400 You started to see basketball players who previously like Converse 0:13:57.600 --> 0:14:01.760 was the shoe for basketball. You started seeing them branch 0:14:01.840 --> 0:14:05.800 out and wear different shoes or sign you know, lucrative 0:14:05.920 --> 0:14:09.319 marketing agreements like Michael Jordan with Air Jordan's Yeah, and 0:14:09.520 --> 0:14:13.400 so you started seeing the migration away from Converse. Now 0:14:13.640 --> 0:14:17.600 Converse did expand their shoeline a little bit. They bought 0:14:17.600 --> 0:14:20.920 the trademark to Jack Purcell sneakers, which are bad mitten sneakers. 0:14:20.960 --> 0:14:23.320 They bought them from B. F. Goodrich. And they also, 0:14:23.720 --> 0:14:25.840 despite the fact that they're starting to lose their market share, 0:14:26.280 --> 0:14:29.000 we're continuing to try to manufacture. So they opened a 0:14:29.040 --> 0:14:33.040 manufacturing point in Lumberton, North Carolina, and a distribution center 0:14:33.080 --> 0:14:36.000 in Charlotte, North Carolina. And then in nineteen seventy two, 0:14:36.400 --> 0:14:38.960 the Stone family, who had been holding onto the company 0:14:39.080 --> 0:14:43.640 for almost forty years, sold Converse. And at that time 0:14:43.800 --> 0:14:47.720 Converse had three major divisions. They had footwear, which you 0:14:47.800 --> 0:14:51.400 know we all associated with Converse. They had sporting goods, 0:14:51.480 --> 0:14:55.120 so this would be stuff beyond shoes, like hockey pucks 0:14:55.720 --> 0:14:58.200 and some other sporting equipment, a lot of it having 0:14:58.320 --> 0:15:01.680 you know, rubber components, because again that's how this company 0:15:01.720 --> 0:15:04.320 started out. And then the third was industrial products. Like 0:15:04.920 --> 0:15:09.040 industrial boots, that kind of stuff, which are still technically footwear. Yeah, 0:15:09.200 --> 0:15:11.560 but it was part under You wouldn't go to like 0:15:11.720 --> 0:15:14.080 a foot locker and say, can I take a look 0:15:14.080 --> 0:15:18.040 at your your electricians boots? But yeah, they they had 0:15:18.080 --> 0:15:21.160 stuff like teeth guards and they had all these other things. 0:15:21.240 --> 0:15:24.360 So so the new owners of Converse kept that going, 0:15:25.000 --> 0:15:27.080 and the new owners it was like another company. And 0:15:27.160 --> 0:15:30.760 this company was called the Ultra Corporation. So under the 0:15:30.840 --> 0:15:35.200 Ultra Corporation, Converse was still eating stuff out. In nineteen 0:15:35.240 --> 0:15:38.200 seventy four, they came out with the one Star, which 0:15:38.520 --> 0:15:41.000 doesn't have the little circle check Taylor just has a 0:15:41.040 --> 0:15:44.520 single star on it. And in five, I guess, with 0:15:44.640 --> 0:15:47.720 all of these sporting goods and industrial products, they came 0:15:47.720 --> 0:15:51.400 out with a ski boot. And now get ready, folks, 0:15:51.760 --> 0:15:54.840 because here come some more follow the lady like the 0:15:54.920 --> 0:15:57.840 bouncing basketball in and out of brinkdom. Yeah, and hey, 0:15:58.000 --> 0:16:00.960 do you know who owns Converse today? It's we're getting 0:16:01.000 --> 0:16:04.040 into that well, but we're not there yet, you know, 0:16:04.240 --> 0:16:06.280 I mean, as we're going year to year. So in 0:16:06.360 --> 0:16:10.720 the late seventies, all the competition from these upstart companies 0:16:10.760 --> 0:16:13.120 like Nike and Puma it's really starting to take its toll. 0:16:13.200 --> 0:16:16.200 So the company began to sell off some of its assets. 0:16:16.520 --> 0:16:21.520 In nineteen seventy nine, the Allied Corporation acquired the Ultra Corporation, 0:16:21.600 --> 0:16:26.120 so now you had a new grand lord over you. 0:16:27.040 --> 0:16:30.720 You know, Ultra Corporation was now a subsidiary of Allied Corporation, 0:16:31.440 --> 0:16:33.880 and so Commerce had new owners again, and they did 0:16:33.960 --> 0:16:38.360 until nine two. So Converse was actually doing pretty well 0:16:38.400 --> 0:16:41.280 at that point despite all the competition. They were selling 0:16:41.320 --> 0:16:44.800 about twelve million pairs of shoes a year. However, in 0:16:44.880 --> 0:16:48.320 a d two the executives over at Allied Corporation said, 0:16:48.840 --> 0:16:52.800 we don't really feel like we belong in the consumer marketplace, 0:16:53.040 --> 0:16:56.240 so we're gonna cut all of our divisions that make 0:16:56.400 --> 0:16:59.680 consumer products. That's not where we want to put our focus. Well, 0:16:59.760 --> 0:17:02.080 that's Converse. You know. Converse is selling shoes to the 0:17:02.120 --> 0:17:05.800 common man, not to you know, IBM, which would have 0:17:05.840 --> 0:17:09.760 been weird anyway. But the computer that wore tennis shoes, 0:17:09.920 --> 0:17:14.000 Oh my gosh, a Kurt Russell reference a Disney Live 0:17:14.040 --> 0:17:17.160 action film. If I'm curious if any of our listeners 0:17:17.480 --> 0:17:19.800 are familiar with the computer that wore tennis shoes, I'm 0:17:19.840 --> 0:17:23.680 sure at least one will be perhaps, So they decided 0:17:23.840 --> 0:17:26.679 to put Converse up for sale. And then you had 0:17:26.680 --> 0:17:29.399 a group of senior executives who were at Converse, some 0:17:29.560 --> 0:17:32.440 of whom had come from the ultra corporation side, and 0:17:32.680 --> 0:17:34.920 they got together and they were able to spin off 0:17:35.080 --> 0:17:40.080 Converse into its own privately operated entity that was spearheaded 0:17:40.119 --> 0:17:44.200 by Richard B. Loind and John P. O'Neill. They bought 0:17:44.280 --> 0:17:48.480 the company for about one hundred million dollars and in 0:17:48.600 --> 0:17:51.600 eighty three they would take the company public and shares 0:17:51.640 --> 0:17:54.800 would begin to sell on the NASDAC stock Exchange. In 0:17:54.840 --> 0:17:58.760 the early nineteen eighties. Converse ended up investing in an 0:17:59.080 --> 0:18:03.040 enormous research development lab. They had seventy researchers working in 0:18:03.160 --> 0:18:09.000 bio mechanical footwear projects. And they even had robots, not 0:18:09.119 --> 0:18:10.800 just like the idea of like maybe a whole bunch 0:18:10.840 --> 0:18:14.720 of robots that are just legs with feet wearing Converse shoes, 0:18:14.800 --> 0:18:17.639 just stomping up and down. Makes me think of Willy Wonka. 0:18:17.840 --> 0:18:22.360 But anyway, in six a company called inter Co International 0:18:22.520 --> 0:18:27.520 acquired Converse, so ownership changes yet again. Standard and Poors 0:18:27.720 --> 0:18:31.280 was not super impressed with inter Co. They actually had 0:18:31.359 --> 0:18:34.880 put the company on credit watch, but Converse was still 0:18:34.960 --> 0:18:39.400 doing well as an independent division of this company. It's 0:18:39.440 --> 0:18:42.160 just that the parent company's future was what was questionable 0:18:42.160 --> 0:18:45.000 at that point. Well, they weren't doing that well for 0:18:45.280 --> 0:18:49.719 very much longer because by Nike and Reebok had taken 0:18:49.920 --> 0:18:52.959 the majority of the market share from Converse. All these 0:18:53.040 --> 0:18:57.480 companies weren't focused on furthering Converse as an athletic and 0:18:57.760 --> 0:19:00.600 casual shoe brands. Right to them, the it was another 0:19:00.760 --> 0:19:03.080 asset that they owned, but it wasn't it wasn't their 0:19:03.119 --> 0:19:06.520 priority exactly. The shoe business was not their primary focus, 0:19:06.600 --> 0:19:10.359 whereas for these competitors that was their businesses. So they 0:19:10.400 --> 0:19:13.480 were able to really capitalize on that. Now, Converse did 0:19:13.560 --> 0:19:16.480 have a brief resurgence in the nineties because even though 0:19:16.520 --> 0:19:19.720 they weren't the best basketball shoot anymore. Now they're appealing 0:19:19.800 --> 0:19:23.920 to like counter culture folks, so like rebels and grunge 0:19:24.080 --> 0:19:27.440 and punk rockers. Yeah, there's a famous picture of Kurt 0:19:27.520 --> 0:19:30.280 Cobain wherein his Chuck Taylor's it became sort of a 0:19:30.480 --> 0:19:35.640 clothing item for a certain section of the population. Yeah, 0:19:35.720 --> 0:19:38.719 they start coming out in more colors and patterns and materials. 0:19:39.280 --> 0:19:41.440 We even get a knee high version. I used to 0:19:41.480 --> 0:19:44.480 want to own a pair of knee high Converse so bad. 0:19:44.600 --> 0:19:46.840 I didn't know that such a thing existed. I knew that, 0:19:47.920 --> 0:19:50.800 so I'm a I'm a Ramones fan, and I knew that. 0:19:50.880 --> 0:19:53.720 Tommy Ramon at one point was asked about Chuck Taylor 0:19:53.880 --> 0:19:58.080 because all the Ramones were wearing Converse, and he says, 0:19:58.240 --> 0:20:00.520 I think he might have been a basketball co true something. 0:20:00.560 --> 0:20:05.639 All I know is he makes cheap shoes. Well, this, 0:20:05.960 --> 0:20:08.920 this resurgence got them back to seven percent of the 0:20:08.960 --> 0:20:11.840 retail shoe market, but only for about ten years. By 0:20:12.040 --> 0:20:14.040 the two thousands, they were back down to one percent 0:20:14.119 --> 0:20:17.239 of the market. Yeah, they were having real issues. There 0:20:17.280 --> 0:20:20.320 had been a lack of investment in Converse for too 0:20:20.400 --> 0:20:22.840 long at this point, and so they were trying to 0:20:22.880 --> 0:20:26.359 play catch up. But they didn't have the resources necessary 0:20:26.520 --> 0:20:29.520 to really do that because they were behind. They didn't 0:20:29.600 --> 0:20:31.920 have the budgets for marketing and the budgets to sign 0:20:32.000 --> 0:20:36.280 athletes the other shoe companies did. In Magic Johnson, who 0:20:36.440 --> 0:20:41.240 was signed as a Converse ambassador, actually said quote, Converse 0:20:41.359 --> 0:20:43.760 as a company is stuck in the sixties and seventies 0:20:44.000 --> 0:20:47.760 they think the Chuck Taylor days are still here. He 0:20:47.880 --> 0:20:50.560 kind of at that time ended his career, at least 0:20:50.640 --> 0:20:53.840 his career with Converse. Yes, there were actually a couple 0:20:53.880 --> 0:20:58.000 of different problems along with his relationship with the company. 0:20:58.200 --> 0:21:01.800 There were times where Converse was preparing litigation because they 0:21:01.840 --> 0:21:04.600 were saying that he was not living up to his 0:21:04.800 --> 0:21:08.639 side of the agreement. This was not a great time 0:21:09.040 --> 0:21:12.080 for the company in in the public relations world. They 0:21:12.119 --> 0:21:15.240 do try to get back into the basketball shoe arena 0:21:15.359 --> 0:21:17.840 with a weapon basketball shoe and the H E zero one, 0:21:17.880 --> 0:21:20.440 which looks more like a traditional sneaker. But at this 0:21:20.560 --> 0:21:23.040 point they're playing catch up. They're just trying to do 0:21:23.280 --> 0:21:25.440 what the other companies have been doing for a while. 0:21:26.320 --> 0:21:30.600 And then in Interco filed for Chapter eleven protection standard 0:21:30.640 --> 0:21:34.240 and pores was proven correct, and two years after that, 0:21:34.400 --> 0:21:37.880 Converse would spin off yet again, and it would try 0:21:37.960 --> 0:21:42.480 to regain kind of it's it's footing. I didn't mean it, 0:21:42.880 --> 0:21:45.600 you did, I know you did. So. Converse had been 0:21:45.640 --> 0:21:48.040 acquired by all these different companies and kind of bought 0:21:48.160 --> 0:21:53.280 and traded around. But now they decided to acquire a 0:21:53.359 --> 0:21:57.439 company themselves. They take on Apex One, which puts them 0:21:57.480 --> 0:21:59.800 in a lot of debt. And not only that, but 0:22:00.000 --> 0:22:04.320 Apex itself did not have the best reputation for making 0:22:04.560 --> 0:22:09.040 orders on time, and so they still had that issue 0:22:09.240 --> 0:22:11.720 when Converse acquired them. And so not only did the 0:22:11.760 --> 0:22:15.679 company acquire debt in trying to buy this other company, 0:22:16.280 --> 0:22:21.040 they acquired the anchor around the neck of Apex where 0:22:21.520 --> 0:22:23.280 there was they had to figure out, how do we 0:22:23.359 --> 0:22:26.760 fix this problem that exists in this company we've just acquired. 0:22:26.920 --> 0:22:29.080 And so by two thousand, Converse had two hundred and 0:22:29.160 --> 0:22:32.199 twenty six point two million dollars worth of debt yikes, 0:22:32.480 --> 0:22:37.480 including in theory a four hundred thousand dollar contract to 0:22:37.600 --> 0:22:41.520 Dennis Rodman, and they only had two hundred one point 0:22:41.600 --> 0:22:44.240 one million dollars worth of assets. So if I'm doing 0:22:44.320 --> 0:22:47.440 my math correctly, they had more debt than they had assets. 0:22:47.920 --> 0:22:51.879 And they were supposed to do a million dollar financing 0:22:52.240 --> 0:22:55.479 and they couldn't even make that. Their stock dropped all 0:22:55.520 --> 0:22:58.720 the way down to fifty cents. He could buy two 0:22:58.920 --> 0:23:02.480 shares of Verse for a dollar, which is really sad 0:23:02.560 --> 0:23:06.280 because at the beginning of it was dollars to share. 0:23:06.760 --> 0:23:12.119 So this leads to its second bankruptcy. The first one 0:23:12.200 --> 0:23:15.280 had been way back shortly after its founding back in 0:23:15.400 --> 0:23:19.280 the late twenties, and now in two thousand one, it 0:23:19.520 --> 0:23:22.119 came time to do it again. As a part of 0:23:22.240 --> 0:23:25.159