May 24, 2024


A Converse sneaker

A Converse sneaker
Photo: Brian Ach/Getty Images for Converse (Getty Images)

Nike has grown tired of depending on sneakerheads for its business. Last month, CEO John Donahoe told the Wall Street Journal that his company wants to regain its “sharp edge” as an innovator of shoe technology. And in doing so, Bloomberg reports, it’s cutting an undisclosed number jobs at its Converse division. The division is “realigning some of our teams to better support future growth,” a representative told the outlet.

Converse, which Nike bought in 2003 for $305 million two years after the Boston-based Chuck Taylor producer had filed for bankruptcy, is generally a small part of the larger company’s operations. According to the most recent Nike annual report, Converse generated $2.5 billion of revenue in 2023, compared to a firm-wide $51 billion take. Nike brought in twice as much money that year from namesake children’s wholesale alone.

Between Nike’s last four earnings calls, executives have mentioned Converse six times. Only once did it specifically call out something positive: Converse endorser Shai Gilgeous-Alexander, the Oklahoma City Thunder player who was the runner-up for the NBA’s Most Valuable Player award this season and who recently signed what Boardroom described as a “massive” contract extension with the brand. Four times, the company was merely mentioning that it sold sneakers from the brand alongside Nike and Jordan Brand shoes.

Most recently, in March — during the earnings call where Donahoe said that “Nike is not performing at its potential,” and that “it’s been clear we need to make certain adjustments” — CFO Matthew Friend said that Converse sale declines had offset single-digit growth elsewhere at the company.

Francisco Velasquez contributed to this article.



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