Converse announced yesterday it had laid off an additional
98 employees and will stop production of several shoe lines "as
part of a restructuring plan to boost weak sales of its athletic
shoes," according to the BOSTON GLOBE. Chris Reidy reports part
of the restructuring will include cutting $25M in overhead
expenses next year by dropping its running, outdoor, walking,
tennis and football lines -- collectively 3% of Converse's
revenues. Converse will focus on its "core categories,"
including basketball, cross-training, children's and "athleisure"
lines. To cut $9M, the shoe-maker will streamline its marketing
department. The company has now terminated 594 people since
August
Analysts say Converse's acquisition of Apex One last spring was a
"disaster." Apex ceased operations in August. Smith Barney
analyst Faye Landes also points to Converse's design
characteristics, which she terms "definitely not stylish." Reidy
writes another factor could be "red-hot Nike, which seems to be
taking away market share" (BOSTON GLOBE, 11/30).
