Speaker 1: Converse, not just Chuck Taylor's, but certainly best known for them.
Speaker 1: These all stars were once the US ideal of athletic Shoe,
Speaker 1: but after close to fifty years of success, these kicks
Speaker 1: seemed like they might kick the bucket. Find out how
Speaker 1: Chuck's chucked the label of athletic Shoe and strolled their
Speaker 1: way back into prominence. This is Converse on the brink, everybody.
Speaker 1: I'm Jonathan Strickland and I'm Ariel Casting, and we're going
Speaker 1: to talk about shoes today. Yes, talking about Converse. I
Speaker 1: learned a whole lot about this company as we were
Speaker 1: doing research, and uh boy, howdy, there were a few
Speaker 1: brink moments in the history of this company. There certainly were.
Speaker 1: But before we get to those, yeah, I'm going to
Speaker 1: say that I fell in love with Converse way back
Speaker 1: when Punky Brewster first came out. So was it like
Speaker 1: right around the time she got stuck in that refrigerator? Hey,
Speaker 1: listen to you, um, but I never owned enough Converse,
Speaker 1: and I do own a pair currently to be able
Speaker 1: to wear two mismatched ones, right. I have owned Converse
Speaker 1: in the past. I remember some some Converse high tops
Speaker 1: back in the day, but It has been a while
Speaker 1: since I've owned any but those. Those were very prominent
Speaker 1: shoes for a while. But as it turns out, the
Speaker 1: company has had a pretty rocky history and uh it,
Speaker 1: once they found their footing, things were going pretty darn
Speaker 1: well for a while. Not it wasn't on purpose, but
Speaker 1: it will happen. But as it turns out, there were
Speaker 1: quite a few times where things could have gone very poorly,
Speaker 1: and it's actually kind of miraculous that they're still around
Speaker 1: in some ways. It is it is. Let's talk about
Speaker 1: the foul ending of the company, give a quick rundown
Speaker 1: of its history leading up to the true brink moment,
Speaker 1: which which will happen a little later in this episode
Speaker 1: than we typically do, but it's because there was a
Speaker 1: lot of interesting stuff that happened leading up to I
Speaker 1: feel like we kind of can't skip the stuff leading
Speaker 1: up to it. So to start off, and don't worry,
Speaker 1: we will not go every single year from the time
Speaker 1: they started their company in nineteen o eight, but we
Speaker 1: will hit some key points. So Converse started in nineteen
Speaker 1: o eight as the Converse Rubbers Shoe Company. It was
Speaker 1: started in Malden, Massachusetts by Marquis Mills converse. What a name, Yes,
Speaker 1: Marquis Mills conversation. Well, he was either going to do
Speaker 1: shoes or General Mills cereals, but no, he he started
Speaker 1: off by working in a footwear manufacturing firm. He rose
Speaker 1: to the level of manager there before he decided to
Speaker 1: found his own company, and he was able to secure
Speaker 1: a capital investment of two d fifty thousand dollars. And
Speaker 1: I went ahead and did the conversion because I was curious,
Speaker 1: if it's a quarter of a million dollars in nineteen eight,
Speaker 1: how much would it be in It'd be nearly seven
Speaker 1: million dollars today. That's a pretty hefty investment. That is
Speaker 1: especially since when they started they were only making shoes seasonally,
Speaker 1: so they were mainly making rubber work shoes and galoshes
Speaker 1: and winterized rubber sols and things like that, which meant
Speaker 1: they weren't keeping their company open year round. They weren't
Speaker 1: keeping their staff year round, right, And then they eventually
Speaker 1: realized that, hey, if we are able to make more
Speaker 1: use out of our facility, then it'll pay itself off faster. Right.
Speaker 1: It's sort of the same argument that Walt Disney had
Speaker 1: when he was looking at different places to put the
Speaker 1: first theme park, the first Disney amusement park, because he
Speaker 1: wanted to eventually find a place that would be able
Speaker 1: to be open year round and not just be seasonal,
Speaker 1: because otherwise, for like half the year, your your investment
Speaker 1: isn't doing anything. Yeah. So he starts thinking about ways
Speaker 1: that perhaps they can diversify, not just do you know, galoshes. Yeah,
Speaker 1: So they look at other shoes that need rubber souls,
Speaker 1: and that turns out to be athletic shoes. Yeah. And
Speaker 1: it's funny because I like that you have here. Netball
Speaker 1: was one of the types of shoes as sort of
Speaker 1: a precursor to basketball. Yes, and tennis and football, but
Speaker 1: I'm not sure if that was soccer soccer American football.
Speaker 1: There were basketball shoes at the time, but Spalding mainly
Speaker 1: had that market. So some people will point to Converse
Speaker 1: and call it like the first basketball shoe company, which
Speaker 1: is not entirely accurate. They were not the first, but
Speaker 1: they would become inextricably paired with basketball, as it turns out,
Speaker 1: and basketball was starting to gain popularity right around this time.
Speaker 1: It had only recently been invented. It was a pretty
Speaker 1: new sport and as it was getting more popular, Converse
Speaker 1: that he said, you know, we should probably make a
Speaker 1: shoe that's specifically tailored for that kind of sport. And
Speaker 1: so they did a lot of research and in nineteen
Speaker 1: seventeen they came out with the Converse All Star Basketball shoe. Yeah,
Speaker 1: that was their famous shoe brand. And the first shoe
Speaker 1: was very sexy. It was brown with black trim. Yeah. Woa.
Speaker 1: But but they ended up increasing the options you could
Speaker 1: have pretty shortly, right, Yes, they did. By the nineteen twenties,
Speaker 1: you could also get black, canvas and leather versions. So
Speaker 1: this would become the first mass produced basketball shoe in
Speaker 1: North America. Whereas Spalding had been doing these and kind
Speaker 1: of smaller batches, Converse was getting ready to do them
Speaker 1: in larger numbers. And it took a little while for
Speaker 1: the shoes to start getting gaining popularity, but after a
Speaker 1: while you could say it was a runaway success. Oh goodness, Jonathan.
Speaker 1: By twenty they were selling about twenty thousand pairs a day.
Speaker 1: That's a lot, Yes, that is a lot of shoes.
Speaker 1: And uh, then we get the famous name Chuck Taylor.
Speaker 1: Taylor was an actual person. He was He was a
Speaker 1: famous basketball player, and in he decided he liked the
Speaker 1: shoes so much that he wanted a job with Converse.
Speaker 1: It's kind of funny because I've read different stories involving
Speaker 1: the way he joined the company, and so it's like
Speaker 1: he wanted to visit this company after trying their shoes.
Speaker 1: He had played for for teams, storied teams, historic teams
Speaker 1: like the Buffalo Germans and the Acron Firestones. Acron Firestones
Speaker 1: in some of the versions of the story I read,
Speaker 1: he walked in to complain about how his feet hurt. Interesting,
Speaker 1: but then the company offered him a job of being
Speaker 1: a sort of marketing guy in salesman, and he picked
Speaker 1: up on it. And as it turns out, Chuck Taylor
Speaker 1: was a heck of a salesman. He would travel around
Speaker 1: the country hosting basketball clinics and and pushing the shoes.
Speaker 1: He drove around in a white Cadillac and his trunk
Speaker 1: was full of Converse All Stars. And it was kind
Speaker 1: of neat because he would hold these sort of basketball
Speaker 1: in x essentially, you know, these almost exhibitions, and they
Speaker 1: were incredibly popular, so they would get big crowds to
Speaker 1: watch these pickup games or what appeared to be pickup games,
Speaker 1: and the whole time he's talking about how the shoes
Speaker 1: are really helping with performance, and you know, it's kind
Speaker 1: of one of those things where the implication is, if
Speaker 1: you want to be a really good player, then you
Speaker 1: just need a pair of these shoes, and that's that's
Speaker 1: what you need to complete your abilities. And that marketing
Speaker 1: message worked like gangbusters. It did. He also at the
Speaker 1: time was helping fine tune the shoes so that they
Speaker 1: had better performance. Now, part of the problem Converse ran
Speaker 1: into early on the company, not the man, but the
Speaker 1: company was that it was growing very quickly at this point.
Speaker 1: And we've seen this happen a few times with different
Speaker 1: companies where they grow so fast that they don't build
Speaker 1: out the support structure two maintain that growth, and it
Speaker 1: just gets out of control. That was starting to happen
Speaker 1: to Converse, and in nineteen nine they actually went into bankruptcy.
Speaker 1: So this could have been our brink moment here that
Speaker 1: they went bankrupt just a few years after being founded.
Speaker 1: At that time, the president of a rival rubber company
Speaker 1: named Mitchell B. Kaufman, that is, the president, not the
Speaker 1: name of the rubber company, came in and he took
Speaker 1: control of Converse since it was bankrupt at that point.
Speaker 1: But he passed away in nineteen thirty, so one year
Speaker 1: after he buys the company, he dies, and Albert Wexler
Speaker 1: was the sort of the executor of the estate, and
Speaker 1: so he oversaw the care of the company for the
Speaker 1: time being. So Marquee is out, Wexler's overseeing the company.
Speaker 1: Chuck Taylor still very much a part of the company,
Speaker 1: so much in fact, that in ninety two they added
Speaker 1: his name to the little support of ankle patch on
Speaker 1: the high tops, um they're not on the tops, and
Speaker 1: they put his name around the All Star and they
Speaker 1: also added eventually Nilot's a year, But I don't think
Speaker 1: that was an honor of Chuck Taylor. No, But that's
Speaker 1: where we started referring to Converse shoes as Chuck Taylor.
Speaker 1: In nineteen thirty three, you had the Stone family move in.
Speaker 1: So one of the other elements you're gonna hear a
Speaker 1: lot about in this podcast is how Converse was traded
Speaker 1: around a lot like there were a lot of different
Speaker 1: entities that owned Converse, but one group that owned it
Speaker 1: for a really long time was the Stone family. It
Speaker 1: was Joseph, Harry Kay and Dewey D. Stone. They bought
Speaker 1: the Converse Rubber Company and they would hold onto it
Speaker 1: for thirty nine years. When they were done, like when
Speaker 1: they got out of it. It was Joseph's son, Stephen Stone,
Speaker 1: who was in charge of the company. And under the Stones,
Speaker 1: Converse would see its greatest success. It would see its
Speaker 1: its biggest climb in the domination of the athletic shoe
Speaker 1: market in the United States, and most of that was
Speaker 1: due to Chuck Taylor's brilliant marketing, holding those basketball clinics
Speaker 1: and convincing all those kids you to have a pair
Speaker 1: of these shoes. So after the Stones take over Converse
Speaker 1: in six they come out with a white high top
Speaker 1: version of the shoe, which became the official Olympic basketball
Speaker 1: team shoe. It was the first year that basketball was
Speaker 1: in the Olympics, I believe, and the US team were
Speaker 1: wearing Converse and they took the gold and the Converse
Speaker 1: had little red and blue trim on it. So I
Speaker 1: would imagine that that could not have been a bad
Speaker 1: marketing at all, being an Olympic winner by our shoes.
Speaker 1: And then beyond that, in World War Two, Chuck Taylor
Speaker 1: served as an Air Force captain, and when he was there,
Speaker 1: he was coaching basketball for the teams and the troops
Speaker 1: and pushing the shoes, and so the shoes became the
Speaker 1: official shoe of the U. S. Armed Forces, official sneaker.
Speaker 1: And we've talked about in the past how companies were
Speaker 1: able to to survive by landing lucrative military contracts. Harley
Speaker 1: Davidson was like that as well. So then we get
Speaker 1: the black and white high top in nineteen forty nine,
Speaker 1: which was one of those shoes that people just associate
Speaker 1: with Converse. It's one of those that really kind of
Speaker 1: defined the look. It was really starting to become I
Speaker 1: guess saying starting to become is the wrong way of
Speaker 1: putting it. It had established itself as the dominant athletic
Speaker 1: shoe at that point. Yeah, basketball teams are starting to
Speaker 1: incorporate them as a part of the uniform. In seven,
Speaker 1: there was a low top Oxford version that came out,
Speaker 1: and by that time Converse had the market share. And
Speaker 1: then by nineteen sixties and basketball teams were asking for
Speaker 1: matching colors to their uniforms for their shoes. And then
Speaker 1: uh in the late sixties you had a pair of
Speaker 1: things happened, one great and one bad. The great one
Speaker 1: was that Chuck was invited into the Basketball Hall of
Speaker 1: Fame for being an ambassador of basketball. But then the
Speaker 1: following year, in nineteen sixty nine, he passed away. This
Speaker 1: is sort of where Converse had hit a peak and
Speaker 1: then it was going to struggle shortly thereafter. Though we're
Speaker 1: not quite at the point that I would call the
Speaker 1: real brink yet. We're still going to get to them now,
Speaker 1: but we're getting to the decline. This is a good
Speaker 1: point before we start that precipitous drop, that we take
Speaker 1: a break and thank our sponsor. Okay, So now we're
Speaker 1: hitting the nineteen seventies and a lot of rival sneaker
Speaker 1: companies are coming out. Running is becoming increasingly more popular,
Speaker 1: and so all of these other companies are trying to
Speaker 1: compete with Converse, and they're doing so by making more
Speaker 1: specialized shoes for running, adding more technology things like pumps
Speaker 1: and springs and cushions into their shoes. I've got Nike
Speaker 1: and Nudidas and Puma who are all starting to edge
Speaker 1: in on Converses market share, and then later you would
Speaker 1: get another company like Reebok also joining in that. I
Speaker 1: remember this era. I remember the era of ridiculous like
Speaker 1: gimmicks with shoes that were supposed to make things like
Speaker 1: high performance shoes. It was a pretty long era. It
Speaker 1: went well into the eighties, well into the no I
Speaker 1: remember the pump the pump shoes where you would pump
Speaker 1: up the air and your shoes to give you that
Speaker 1: big bounce, and to the point where I was all
Speaker 1: the kids in school and I was going to school
Speaker 1: were convinced if you pumped them up enough, you would
Speaker 1: just explode yourself off into the stratosphere, which I never
Speaker 1: actually managed to do. I'm sorry, I'll fly one day. Well,
Speaker 1: these ridiculously technological shoes were really comfortable, and so people
Speaker 1: started wearing them also as their casual shoes. And while
Speaker 1: all these other shoe companies are trying to make the
Speaker 1: latest and greatest to appeal to all of these runners
Speaker 1: and in this new market that's growing, Converse she said,
Speaker 1: we're going to keep doing what we're doing. Yeah. And meanwhile,
Speaker 1: you started to see the core audience for Converse, the
Speaker 1: core customers for Converse, start to drift away from the brand.
Speaker 1: You started to see basketball players who previously like Converse
Speaker 1: was the shoe for basketball. You started seeing them branch
Speaker 1: out and wear different shoes or sign you know, lucrative
Speaker 1: marketing agreements like Michael Jordan with Air Jordan's Yeah, and
Speaker 1: so you started seeing the migration away from Converse. Now
Speaker 1: Converse did expand their shoeline a little bit. They bought
Speaker 1: the trademark to Jack Purcell sneakers, which are bad mitten sneakers.
Speaker 1: They bought them from B. F. Goodrich. And they also,
Speaker 1: despite the fact that they're starting to lose their market share,
Speaker 1: we're continuing to try to manufacture. So they opened a
Speaker 1: manufacturing point in Lumberton, North Carolina, and a distribution center
Speaker 1: in Charlotte, North Carolina. And then in nineteen seventy two,
Speaker 1: the Stone family, who had been holding onto the company
Speaker 1: for almost forty years, sold Converse. And at that time
Speaker 1: Converse had three major divisions. They had footwear, which you
Speaker 1: know we all associated with Converse. They had sporting goods,
Speaker 1: so this would be stuff beyond shoes, like hockey pucks
Speaker 1: and some other sporting equipment, a lot of it having
Speaker 1: you know, rubber components, because again that's how this company
Speaker 1: started out. And then the third was industrial products. Like
Speaker 1: industrial boots, that kind of stuff, which are still technically footwear. Yeah,
Speaker 1: but it was part under You wouldn't go to like
Speaker 1: a foot locker and say, can I take a look
Speaker 1: at your your electricians boots? But yeah, they they had
Speaker 1: stuff like teeth guards and they had all these other things.
Speaker 1: So so the new owners of Converse kept that going,
Speaker 1: and the new owners it was like another company. And
Speaker 1: this company was called the Ultra Corporation. So under the
Speaker 1: Ultra Corporation, Converse was still eating stuff out. In nineteen
Speaker 1: seventy four, they came out with the one Star, which
Speaker 1: doesn't have the little circle check Taylor just has a
Speaker 1: single star on it. And in five, I guess, with
Speaker 1: all of these sporting goods and industrial products, they came
Speaker 1: out with a ski boot. And now get ready, folks,
Speaker 1: because here come some more follow the lady like the
Speaker 1: bouncing basketball in and out of brinkdom. Yeah, and hey,
Speaker 1: do you know who owns Converse today? It's we're getting
Speaker 1: into that well, but we're not there yet, you know,
Speaker 1: I mean, as we're going year to year. So in
Speaker 1: the late seventies, all the competition from these upstart companies
Speaker 1: like Nike and Puma it's really starting to take its toll.
Speaker 1: So the company began to sell off some of its assets.
Speaker 1: In nineteen seventy nine, the Allied Corporation acquired the Ultra Corporation,
Speaker 1: so now you had a new grand lord over you.
Speaker 1: You know, Ultra Corporation was now a subsidiary of Allied Corporation,
Speaker 1: and so Commerce had new owners again, and they did
Speaker 1: until nine two. So Converse was actually doing pretty well
Speaker 1: at that point despite all the competition. They were selling
Speaker 1: about twelve million pairs of shoes a year. However, in
Speaker 1: a d two the executives over at Allied Corporation said,
Speaker 1: we don't really feel like we belong in the consumer marketplace,
Speaker 1: so we're gonna cut all of our divisions that make
Speaker 1: consumer products. That's not where we want to put our focus. Well,
Speaker 1: that's Converse. You know. Converse is selling shoes to the
Speaker 1: common man, not to you know, IBM, which would have
Speaker 1: been weird anyway. But the computer that wore tennis shoes,
Speaker 1: Oh my gosh, a Kurt Russell reference a Disney Live
Speaker 1: action film. If I'm curious if any of our listeners
Speaker 1: are familiar with the computer that wore tennis shoes, I'm
Speaker 1: sure at least one will be perhaps, So they decided
Speaker 1: to put Converse up for sale. And then you had
Speaker 1: a group of senior executives who were at Converse, some
Speaker 1: of whom had come from the ultra corporation side, and
Speaker 1: they got together and they were able to spin off
Speaker 1: Converse into its own privately operated entity that was spearheaded
Speaker 1: by Richard B. Loind and John P. O'Neill. They bought
Speaker 1: the company for about one hundred million dollars and in
Speaker 1: eighty three they would take the company public and shares
Speaker 1: would begin to sell on the NASDAC stock Exchange. In
Speaker 1: the early nineteen eighties. Converse ended up investing in an
Speaker 1: enormous research development lab. They had seventy researchers working in
Speaker 1: bio mechanical footwear projects. And they even had robots, not
Speaker 1: just like the idea of like maybe a whole bunch
Speaker 1: of robots that are just legs with feet wearing Converse shoes,
Speaker 1: just stomping up and down. Makes me think of Willy Wonka.
Speaker 1: But anyway, in six a company called inter Co International
Speaker 1: acquired Converse, so ownership changes yet again. Standard and Poors
Speaker 1: was not super impressed with inter Co. They actually had
Speaker 1: put the company on credit watch, but Converse was still
Speaker 1: doing well as an independent division of this company. It's
Speaker 1: just that the parent company's future was what was questionable
Speaker 1: at that point. Well, they weren't doing that well for
Speaker 1: very much longer because by Nike and Reebok had taken
Speaker 1: the majority of the market share from Converse. All these
Speaker 1: companies weren't focused on furthering Converse as an athletic and
Speaker 1: casual shoe brands. Right to them, the it was another
Speaker 1: asset that they owned, but it wasn't it wasn't their
Speaker 1: priority exactly. The shoe business was not their primary focus,
Speaker 1: whereas for these competitors that was their businesses. So they
Speaker 1: were able to really capitalize on that. Now, Converse did
Speaker 1: have a brief resurgence in the nineties because even though
Speaker 1: they weren't the best basketball shoot anymore. Now they're appealing
Speaker 1: to like counter culture folks, so like rebels and grunge
Speaker 1: and punk rockers. Yeah, there's a famous picture of Kurt
Speaker 1: Cobain wherein his Chuck Taylor's it became sort of a
Speaker 1: clothing item for a certain section of the population. Yeah,
Speaker 1: they start coming out in more colors and patterns and materials.
Speaker 1: We even get a knee high version. I used to
Speaker 1: want to own a pair of knee high Converse so bad.
Speaker 1: I didn't know that such a thing existed. I knew that,
Speaker 1: so I'm a I'm a Ramones fan, and I knew that.
Speaker 1: Tommy Ramon at one point was asked about Chuck Taylor
Speaker 1: because all the Ramones were wearing Converse, and he says,
Speaker 1: I think he might have been a basketball co true something.
Speaker 1: All I know is he makes cheap shoes. Well, this,
Speaker 1: this resurgence got them back to seven percent of the
Speaker 1: retail shoe market, but only for about ten years. By
Speaker 1: the two thousands, they were back down to one percent
Speaker 1: of the market. Yeah, they were having real issues. There
Speaker 1: had been a lack of investment in Converse for too
Speaker 1: long at this point, and so they were trying to
Speaker 1: play catch up. But they didn't have the resources necessary
Speaker 1: to really do that because they were behind. They didn't
Speaker 1: have the budgets for marketing and the budgets to sign
Speaker 1: athletes the other shoe companies did. In Magic Johnson, who
Speaker 1: was signed as a Converse ambassador, actually said quote, Converse
Speaker 1: as a company is stuck in the sixties and seventies
Speaker 1: they think the Chuck Taylor days are still here. He
Speaker 1: kind of at that time ended his career, at least
Speaker 1: his career with Converse. Yes, there were actually a couple
Speaker 1: of different problems along with his relationship with the company.
Speaker 1: There were times where Converse was preparing litigation because they
Speaker 1: were saying that he was not living up to his
Speaker 1: side of the agreement. This was not a great time
Speaker 1: for the company in in the public relations world. They
Speaker 1: do try to get back into the basketball shoe arena
Speaker 1: with a weapon basketball shoe and the H E zero one,
Speaker 1: which looks more like a traditional sneaker. But at this
Speaker 1: point they're playing catch up. They're just trying to do
Speaker 1: what the other companies have been doing for a while.
Speaker 1: And then in Interco filed for Chapter eleven protection standard
Speaker 1: and pores was proven correct, and two years after that,
Speaker 1: Converse would spin off yet again, and it would try
Speaker 1: to regain kind of it's it's footing. I didn't mean it,
Speaker 1: you did, I know you did. So. Converse had been
Speaker 1: acquired by all these different companies and kind of bought
Speaker 1: and traded around. But now they decided to acquire a
Speaker 1: company themselves. They take on Apex One, which puts them
Speaker 1: in a lot of debt. And not only that, but
Speaker 1: Apex itself did not have the best reputation for making
Speaker 1: orders on time, and so they still had that issue
Speaker 1: when Converse acquired them. And so not only did the
Speaker 1: company acquire debt in trying to buy this other company,
Speaker 1: they acquired the anchor around the neck of Apex where
Speaker 1: there was they had to figure out, how do we
Speaker 1: fix this problem that exists in this company we've just acquired.
Speaker 1: And so by two thousand, Converse had two hundred and
Speaker 1: twenty six point two million dollars worth of debt yikes,
Speaker 1: including in theory a four hundred thousand dollar contract to
Speaker 1: Dennis Rodman, and they only had two hundred one point
Speaker 1: one million dollars worth of assets. So if I'm doing
Speaker 1: my math correctly, they had more debt than they had assets.
Speaker 1: And they were supposed to do a million dollar financing
Speaker 1: and they couldn't even make that. Their stock dropped all
Speaker 1: the way down to fifty cents. He could buy two
Speaker 1: shares of Verse for a dollar, which is really sad
Speaker 1: because at the beginning of it was dollars to share.
Speaker 1: So this leads to its second bankruptcy. The first one
Speaker 1: had been way back shortly after its founding back in
Speaker 1: the late twenties, and now in two thousand one, it
Speaker 1: came time to do it again. As a part of
Speaker 1: their bankruptcy and their restructuring, they handed over all of
Speaker 1: their u S, sales and marketing of their product to
Speaker 1: a third party company and decided they were just going
Speaker 1: to become a licensing company. They were going to license
Speaker 1: to shoes out and survive on getting those licensing fees.
Speaker 1: And one of the companies that they wanted to buy
Speaker 1: their licensing was Global Brand Marketing, Inc. Who did diesel shoes. Okay,
Speaker 1: they licensed diesel shoes, so kind of a good idea there.
Speaker 1: Some people were saying that the reason the timing for
Speaker 1: the filing for bankruptcy was all about they wanted to
Speaker 1: make sure that they could handle the creditors right that
Speaker 1: they didn't want to just close down shop because if
Speaker 1: they did, they'd still owe the creditors money. They wouldn't
Speaker 1: have any protection against that. So this was kind of
Speaker 1: a long shot for the company to remain, at least
Speaker 1: in name, still a company and not have creditors come
Speaker 1: banging on everyone's doors. Yeah, by two into their sales
Speaker 1: were only up to two five million dollars. Yep. And
Speaker 1: as I wrote in my notes, and these are puns
Speaker 1: that I made on purpose, things were looking pretty grim
Speaker 1: for a company that had its toes stepped on so
Speaker 1: many times over the years. But the rescue was just
Speaker 1: around the corner. And we'll get to that after we
Speaker 1: take a brief moment to thank our sponsor. All Right, So,
Speaker 1: second round of bankruptcy for Converse. This time it looks
Speaker 1: really bad. They're going to make a move to being
Speaker 1: just a licensor. They're going to license out the Converse
Speaker 1: brand to any company that can afford to pay the license.
Speaker 1: They're doing their best to stave off the creditors. They
Speaker 1: need a night in shining Armor to come to their rescue,
Speaker 1: and one did in uh, just a couple of years.
Speaker 1: But in between that, they still had a couple of
Speaker 1: other things that they were trying to do just to
Speaker 1: stay afloat. Yeah, they moved all of their manufacturing to Asia,
Speaker 1: which shut down their manufacturing plants in the States, in
Speaker 1: North Carolina, Texas and also in Mexican. Also in Mexico,
Speaker 1: they were looking to cut prices or cut costs even
Speaker 1: to the point where they were shutting down their Mexico
Speaker 1: manufacturing plant, and they dropped their workforce from hundred people
Speaker 1: to two hundred people then, and they also sold all
Speaker 1: their non footwear licensing to another company, one that was
Speaker 1: in Japan, for somewhere in the twenty million dollar range.
Speaker 1: And then in two thousand and three we get the
Speaker 1: Night in Shining Armor. It's not really armor, it's a
Speaker 1: night and Shining Nikes. Night and Shining Nikes. They swished
Speaker 1: right in. Yes, they did very good. Yea. And they
Speaker 1: bought Converse for three hundred and five million dollars. This
Speaker 1: is interesting. I mean, converse is annual revenue was one
Speaker 1: million dollars less than the price that Nike was paying
Speaker 1: for him, and it was a company that was still
Speaker 1: obviously dealing with creditors. But Nike saw the value in
Speaker 1: that brand. And while you could worry about consolidation when
Speaker 1: you're talking about two major brands in the athletic shoe space,
Speaker 1: without Nike, there's pretty much no doubt that Converse would
Speaker 1: have ceased to exist over at some point. Yes, certainly,
Speaker 1: certainly because they had enough money to make it through
Speaker 1: the restructuring and through the bankruptcy, but not necessarily to
Speaker 1: continue on and regain the ground. But Nike focused on
Speaker 1: keeping them a casual shoe and a shoe of creative expression.
Speaker 1: So instead of appealing to sports enthusiasts, they're trying to
Speaker 1: appeal to artists and kind of that counterculture that had
Speaker 1: picked up Converse a while back. Now, they were kind
Speaker 1: of focusing on a lot of pop culture as well
Speaker 1: as also a lot of nostalgia, like you know, the
Speaker 1: sort of thing where every twenty years or so, you
Speaker 1: see that the younger generations start to adopt stuff from
Speaker 1: previous generations. Yes, so they were really trading on that
Speaker 1: as well. Yeah, they had fashion brands and icons and
Speaker 1: designers come and make like special edition Converse and very
Speaker 1: expensive Converse. They even had a high healed option at
Speaker 1: one point. Wow. And then you get the Connectivity campaign
Speaker 1: that was launched in two thousand eight. That was another
Speaker 1: marketing campaign. So, you know, Chuck Taylor's long gone at
Speaker 1: this point, but this was a real push to kind
Speaker 1: of regain that place in pop culture and people's minds. Yeah,
Speaker 1: and they were really smart about it, choose. So the
Speaker 1: campaign spread across seventy five countries, and they made sure
Speaker 1: to use celebrities specific to each global region to help
Speaker 1: push this marketing campaign. So instead of like using Chuck
Speaker 1: Taylor over the entire globe, they were trying to keep
Speaker 1: their spokespeople relevant whoever was seeing the marketing, and it
Speaker 1: weren't because it caused increased in year year revenue. Yeah,
Speaker 1: and these days they're not doing so shabby. Like for
Speaker 1: a company that was again on the brink of total disaster,
Speaker 1: Nike was really able to help coax Converse back to
Speaker 1: new heights, unprecedented heights for the company. By they were
Speaker 1: making one point for billion dollars in sales. Phenomenal it is,
Speaker 1: and six of all Americans claimed to have owned or
Speaker 1: either currently own a pair of Chuck tailors at the time,
Speaker 1: you would say that they've definitely changed kind of their
Speaker 1: marketing approach. Like back in the day, it was all
Speaker 1: about a basketball shoe, which some people would wear as
Speaker 1: sort of a casual shoe. Now they're targeting that sort
Speaker 1: of usual market from the get go. Yeah, not as
Speaker 1: this is an athletic shoe that you can also just
Speaker 1: wear around, but that this is a shoe designed for
Speaker 1: you to wear day to day. But it's a little
Speaker 1: nicer than just a an old sneaker. It's a little yeah,
Speaker 1: it's it's smart, casual, and they were trying to appeal
Speaker 1: to I guess I would say more of a millennial crowd.
Speaker 1: Their their marketing idea was brand made for and inspired
Speaker 1: by artists um and millennials have been known to like
Speaker 1: more of an experience, more of original things. So if
Speaker 1: you're going to buy a Converse, the ability to have
Speaker 1: something unique in this well known brand is appealing. Yeah,
Speaker 1: and they have had, you know, a couple of more
Speaker 1: fumbles throughout the years. Between two thousand and twelve and now.
Speaker 1: In two thousand fourteen, Nike suit a bunch of companies
Speaker 1: for making knockoff Converse and stealing their trademark. And in
Speaker 1: two seventeen they had a drop in sales because they
Speaker 1: believe the market was oversaturated with shoes. I see a
Speaker 1: note here out the greatest recording artist of all time
Speaker 1: and Converse. I want to hear about this story. Oh so,
Speaker 1: Miley Cyrus is working with Converse to make a shoe,
Speaker 1: as they have partnered with many artists, and this one
Speaker 1: is a black and pink platform Converse shoe. I'll be
Speaker 1: sporting that by better or I'll be highly disappointed. Jonathan.
Speaker 1: Listen when when Miley Cyrus comes to the office, because
Speaker 1: I'm sure she will, she will be impressed. They'll be
Speaker 1: kicking it in some Miley Cyrus version, Converse, it'll probably
Speaker 1: be killing my feet. Better the platforms than the high heels. Yes,
Speaker 1: I mean I can't heels, do make my never mind? Yeah,
Speaker 1: I I think platform is better than heels. Yes, that's
Speaker 1: all we've got on the subject. So we got a bounce. Yeah, nice, Nice.
Speaker 1: But this was really fascinating because I had never looked
Speaker 1: into the corporate history of I had no idea that
Speaker 1: the company had changed hands so many times, and trust me,
Speaker 1: I've been there. It says a lot when a company
Speaker 1: can go through that many changes in management and still
Speaker 1: maintain a sense of cohesion. It is really hard to do.
Speaker 1: The fact that Converse was able to survive all of
Speaker 1: that says a lot about how they were able to
Speaker 1: create a vision in the minds of the consumer and
Speaker 1: make good on that to the point where I think
Speaker 1: a lot of people wouldn't be able to imagine a
Speaker 1: world that didn't have conversation. Yeah, I mean I kind
Speaker 1: of always took it for granted, and just like this
Speaker 1: is a shoe that's always been around and will always
Speaker 1: be around and will always be popular. So I think
Speaker 1: when we look at different stories and we try and
Speaker 1: kind of put our finger on what was the the
Speaker 1: key component of that brain story For this one, I
Speaker 1: would say that it was really the marketing. It was
Speaker 1: the fact that Converse was able to sell this idea
Speaker 1: and back it up, Like, It's not just that they
Speaker 1: sold an idea, they were able to create a shoe
Speaker 1: that met expectations of people long enough for them to
Speaker 1: really establish themselves. Yes, well, that wraps up this episode
Speaker 1: of The Brink. We're going to be talking about all
Speaker 1: sorts of companies in the near future. But if you
Speaker 1: guys have any specific questions or maybe there's a company
Speaker 1: or an entrepreneur that you think really merits discussion and
Speaker 1: a deep dive, then by all means you should reach
Speaker 1: out to us. Yeah, and you can do so at
Speaker 1: feedback at the Brink podcast dot show and our website
Speaker 1: is The Brink Podcast dot Show. You can go there
Speaker 1: and listen to older episodes and learn all about us,
Speaker 1: as well as the other ways to contact us. And
Speaker 1: we look forward to hearing from you and uh until
Speaker 1: next time, I have been Jonathan Strickland and I've been
Speaker 1: aerial casting. Bye.