Nike last week unveiled the new Converse Chuck Taylor All Star II, and the company has been "careful to preserve the Converse retro aesthetic because it’s good business: Chuck Taylors have become a very important source of Nike revenue and earnings growth," according to Jeff Sommer of the N.Y. TIMES. The "venerable Chuck Taylors have been one of Nike’s successes." These days, Converse "accounts for a surprisingly large share of Nike’s overall revenue and, especially, its profits." Converse’s revenue in FY '15 approached $2B, a "nearly tenfold increase" since '02. Nike’s overall revenue "grew too, but at a slower pace," to $30.6B. Converse’s rapid growth "helps explain why it is now the only Nike operating unit whose revenue and earnings are disclosed separately in Nike’s income statements." Separate numbers for Jordan basketball shoes, Nike Golf and Hurley surf wear, for example, "don’t appear in those reports." Converse accounted for 6.5% of Nike’s revenue and 12.2% of its operating profit. Converse CMO Geoff Cottrill said that Converse "sells more than 270,000 pairs of Chuck Taylors a day, 365 days a year." That works out to "roughly 100 million pairs a year -- and that’s before the introduction of the new sneakers." All Star II shoes "contain Lunarlon cushioning technology, which is common in Nike brand shoes." In most sizes and colors, the new shoes "sold out within 24 hours online." Cottrill said that Converse "has learned the Coca-Cola lesson," referencing the failed launch of "new Coke" in '85. Cottrill: “We’re not taking anything away. What Coke did is they took an iconic product and changed it and offered no choice to consumers. We’re not doing that. We’re continuing with the original, classic Chuck, and we’re offering the new one" (N.Y. TIMES, 8/2).
