Converse on the move, and in search of talent
Just 14 years ago, Converse Inc. was a bankrupt shoe business headquartered in a sleepy Massachusetts suburb. Everyone knew the century-old company’s name but not enough people were buying its sneakers.
Now, Converse is a thriving business with booming sales, thanks largely to a decision to stop competing in the athletic shoe market and embrace the crowd that was actually buying its All-Star sneakers for their casual appeal. Converse shoes — from basic black Chucks to wildly patterned alternatives — have become a mainstream fashion statement.
A clear sign of that retooled success: The company is getting ready to leave its North Andover home for a new headquarters at Boston’s Lovejoy Wharf. Chief executive Jim Calhoun said the April move to a 10-story mix of old brick walls and a new open concept design in the heart of the city will help Converse attract young creative talent.
“The really fascinating thing about Converse is that the company went bankrupt as an athletic brand,” Calhoun said. “The reason we’re still around is that these kids that we now call cool kids, who weren’t once cool kids — they were punks, they were starving artists, they were sort of outside on the fringes — kept us going.”
And going. Converse, now a subsidiary of Nike Inc., has reported an increase of 71 percent in sales over the last five years. The company rang up $1.7 billion in revenues in its most recent fiscal year, contributing nearly $500 million in earnings to its corporate parent.
Marquis Mills Converse, a Boston department store manager, founded the Converse Rubber Shoe Co. in Malden in 1908. The company started off making winter boots and introduced the All-Star, then a basketball shoe, in 1917.
The shoe remained a staple on the court for decades. But Converse filed for bankruptcy in 2001, unable to compete with brands like Nike and Reebok.
“They had fallen behind in the performance brand space,” said Doug Quintal, professor of marketing at Emerson College. “They just got lost in that shuffle.”
In 2011, Nike named Calhoun the chief executive of Converse. The Boston native had worked in Nike’s basketball business for a number of years before moving on to other brands. His father is the former University of Connecticut coach Jim Calhoun, who also led the men’s basketball team at Northeastern University in the ’70s and ’80s.
Calhoun said Converse’s athletic sales were “dismal,” while the All-Stars and other lifestyle shoes were thriving. Over time, the brand had crossed over into casual wear and its Jack Purcells and Chuck Taylors adorned the feet of icons like James Dean and Kurt Cobain.
Meanwhile, society had changed and a subculture of musicians and artists was becoming much more mainstream. With popular shows like “High School Musical” and “Portlandia,” the tech boom and rise of indie music, it became cool to be geeky, artsy or just plain different.
“What used to be counter culture is now culture. What used to be uncool is now cool,” Calhoun said. “We’re taking advantage of it and embracing it.”
To Calhoun, the decision to cut basketball and focus more on lifestyle was a no-brainer. Converse made its last new performance shoe in 2013.
In a move to protect the longstanding design of the Chucks, the company filed lawsuits last year against more than two dozen other shoe makers and retailers it accused of knocking off the iconic shoe. Several companies sell casual shoes that closely resemble Converse styles.
Analysts say other business decisions also contributed to the company’s boom.
Matt Powell, a sports industry analyst with the NPD Group of New York, said the most significant change is that Converse has taken back its international business. For years, Converse had strictly sold wholesale to distributors who were licensed to sell the shoes to retailers overseas.
The company also collaborates with fashion brands, such as John Varatos, Maison Martin Margiela, and Missoni, and artists like Damian Hirst and the late Andy Warhol to build hype and create a “cool factor,” Powell said.
Calhoun said he hopes the move to Boston will help continue the momentum.
“We want to be where things are happening,” he said. “It made sense to be somewhere where we have access to talent and could be part of the youth creative culture.”
The 214,000-square-foot building was the first property Converse toured three years ago in search of a new headquarters.
An open atrium and a staircase runs up each floor of the building, designed to inspire collaboration between departments. A deck on the ninth floor overlooks the Charles River.
A second deck on the first floor reaches out to the rebuilt wharf, where Converse hopes to offer a taxi service. The space features a 1,200-square-foot professional music studio, called Converse Rubber Tracks, that will be free to local musicians. A retail store will also sell unique shoes that are not sold anywhere else.
“We loved the idea of something that could constantly transform itself,” Calhoun said of the building. “It was too good to pass up.”