BOSTON Nike buys Converse, obtains foothold in retro-shoe market

Converse would operate as a separate unit within the shoe-making giant.
BOSTON (AP) -- Nike Inc. is leaping into the retro-shoe market by buying Converse Inc., which has sold more than 750 million pairs of its classic canvas and rubber "Chuck Taylor All Stars."
Under the deal announced Wednesday, Nike, the top maker of high-tech athletic shoes, will pay $305 million and assume certain Converse liabilities.
Nike overtook Converse as the dominant basketball shoemaker in the 1980s. After battling Nike and Reebok's surging popularity for nearly 20 years, Converse filed for bankruptcy in January 2001, shifting production from Lumberton, N.C., to Asia.
Later that year, the North Andover-based company was bought by private investors who have tried to revive the brand. Last year, Nike had $10.7 billion in revenue, while Converse reported $205 million.
Robert Toomey, an analyst for RBC Dain Rauscher in Seattle, said Nike was probably looking to cash in on the popularity of "retro" shoes and Converse's close brand association with basketball, particularly for Americans who grew up in the 1950s and '60s.
Earlier this year, New Balance relaunched its PF Flyers canvas sneakers, jumping on the retro bandwagon.
"Retro styling has come back so strong, a lot stronger than I would have expected," Toomey said.
Nike spokeswoman Joani Komlos said Converse will be operated as a separate brand within the company. Nike would pay for the deal with cash and assume Converse debt.
"Converse is one of the strongest footwear brands in the world with great heritage and a long history of success," said Tom Clarke, Nike's president of new business ventures.
Converse invented basketball shoes in the early days of the game, and "Chucks" got their name from Chuck Taylor, a Converse salesman who traveled the country from the 1920s until the 1960s, evangelizing the game and selling shoes.