Nike’s turnaround is stalling, and its Converse brand is a big reason why

Converse makes up just 2.5% of Nike’s sales. Last quarter, it accounted for 20% of the company’s sales decline.

Two years into Elliott Hill’s tenure as Nike’s CEO, the 118-year-old maker of the Chuck Taylor is a big drag on a comeback that isn’t coming together, with Converse sales down 28% in the most recent quarter and analysts openly wondering whether Nike will keep it in its portfolio.

Converse’s Chuck Taylor high-tops have gone in and out of style over the decades, but the shoe’s vulcanized rubber sole and heavy, stiff profile are out of step with trends right now, and the brand is enduring an unusually long, deep cold streak.

Too dependent on one style

Nike bought Converse for $305 million in 2003, seeing enormous potential to rehabilitate an iconic brand. Converse had dominated athletic footwear for decades, but by the 1990s, it was reeling, and it ultimately filed for bankruptcy protection in 2001. 

Converse started out as a rubber shoe manufacturer in 1908 and early on made items like winterized rubber-soled footwear and galoshes. Then in 1916, it made its first ever basketball shoes, introducing the Converse All-Star the following year. The model became the first real hit in the emerging athletic shoe industry. Converse’s growing popularity accelerated in 1932........

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