Nike should put Converse on the block: It's just a distraction

Its CEO has very few easy wins in reach but this could well be one

- ANDREA FELSTED

Nike has a range of challenges that should make it stick to its knitting.

(REUTERS)

“Got Chucks on with Saint Laurent,” declared Mark Ronson and Bruno Mars in their 2014 hit Uptown Funk. Yves Saint Laurent held its fashion show in Paris a few weeks ago. But where were the Chucks? Likely stuck on a retailer's discount rack.

Elliott Hill, Nike's chief executive officer, revealed a day after the Saint Laurent show that sales at Converse, maker of the Chuck Taylor All Star sneaker, had fallen 28% in the sportswear company’s first quarter, excluding the effects of currency movements. Rather than suffer the distraction of trying to put the minor brand on a stronger footing, Hill should sell Converse—or at least be open to offers.

As the heat from Adidas’ Samba sneaker fades, consumers are looking for alternatives. Converse tends to go in and out of style. It was hot in the early aughts and so should be getting a lift from the adoption of other fashion favourites from that era, such as skinny jeans and khaki jackets. But so far, consumers [in the West] don’t seem to be swapping the three stripes of Adidas for the starred ankle logo of Chucks.

Hill is trying to change that. He told analysts when he announced first-quarter earnings that he had installed new management at Converse, and that the Chuck Taylor shoe was in the “early stages of a global market reset.”