Converse Laces Up Basketball Rebound

Shoe Marketer Has Sights on Snaring No. 3 Spot

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What goes around, comes around. And for Converse, it's been a long time coming.

An NBA star willing to don a dress in ads has helped Converse move closer to the position it had in the mid-1960s as the dominant basketball shoe brand.

While Converse hopes to be the No. 3 athletic footwear brand by 1996, industry observers don't think it will take that long. They're betting Converse, with a 4.24% share of the $6.05 billion market last year, will pass L.A. Gear (4.64%) and Keds (5.76%) by yearend. All trail Nike and Reebok, with a combined 53% share.

Converse, with global sales of $383 million last year, hopes to reach $600 million by '96.

As Converse moves up, so does its ad budget. The marketer plans to spend more than $50 million in 1995. While minuscule compared with Nike and Reebok's combined $200 million in athletic footwear spending, it represents a more than 300% increase from '91.

Since Converse is targeting a younger audience, its main media vehicle is MTV: Music Television, on which more than half of the budget is committed.

Converse's history is as a basketball shoe marketer, and it's no coincidence much of its renewed success has come since 1991, when NBA star Larry Johnson first appeared in TV spots as "Grandmama." The ads, from Houston, Effler & Partners, Boston, feature Mr. Johnson in a flashy, humorous effort intended to catch kids' attention.

For the past three years, Mr. Johnson has been to Converse what Michael Jordan has been to Nike. The seven "Grandmama" spots have sold lots of shoes (though the company won't say how many).

The rebound also coincides roughly with Apollo Investment Fund's 1992 purchase of Converse parent Interco, St. Louis, which filed for Chapter 11 bankruptcy protection in 1991.

"It's hard to be enthusiastic when your parent is struggling in bankruptcy," Converse President-CEO Gib Ford said. "So we needed to create a new atmosphere in the company, and we went out and got some new people that infused this company withyouth, energy and optimism."

"Clearly, the bankruptcy changed a lot of things at Interco and at Converse," said John Horan, editor of Sporting Goods Intelligence. "Since then, Converse has been growing steadily, and today it is a much better company than what it once was."

Led by Senior VP-Marketing Joanna Jacobson, Converse is bouncing back by doing what it does best-basketball and canvas footwear-but with a '90s marketing twist. Its basketball shoes became high tech and the ads for them became Nikelike: performance-focused but entertainment-driven. And its classic canvas brands-Chuck Taylor All Star and Jack Purcell-were recast to appeal to Generation X.

Next year, Converse will return to the tennis and running shoe business. And capitalizing on hot outdoor footwear trends, Converse will introduce its first "athleisure" boot next spring.

Next year will also bring the redesign of the kids Conasaur Collection-footwear and apparel adorned with dinosaur designs. A campaign slated for kids cable network Nickelodeon is planned.

"One of our objectives is to have consumers recognize that Converse is two distinctive brands," Ms. Jacobson said. "We market sneakers for the hard-core athlete and athleisure shoes for hip, trendsetting young people."

Yet while Converse this year has reintroduced its Converse One Star and Dr. J canvas casual sneakers with great success, experts warn against taking the old style, back-to-basics approach too far.

"The canvas business tends to be very cyclical." Mr. Horan said. "...Clearly, they need to start building in new categories."

New categories will mean new advertising.

"Advertising has become a crucial and important part of the marketing mix. Ten years ago, it wasn't," said Mr. Ford, noting that a decade ago Converse mainly marketed basketball shoes by putting them on the feet of hundreds of NBA players. But as Converse builds, don't expect to see a stable of high-price endorsers. That's not what Mr. Ford wants, even if he had the budget.

That strategy can be risky. For example, sales of products endorsed by Mr. Johnson fell last year, when he missed much of the NBA season with a back injury. He will be back in ads in the spring.

Conversely, Mr. Ford pointed to the success of the Run 'N Slam, a basketball shoe made for quicker ballplayers and endorsed by NBA star Kevin Johnson. The shoe was the best seller of last year's back-to-school season, industry experts say.

Converse is developing a "spokesthing" that will be a staple of future marketing. The animated reptilian creature, dubbed "Norman," makes its debut in spring "Psycho Training" ads.

Converse has relied on edgy cartoon characters to market its Chuck Taylor All Star and Jack Purcell shoes. The pairing seems odd-dark, cutting-edge creative to sell retro-'50s fashion. Ms. Jacobson said it combines different preferences of twentysomethings.

Her boss is more befuddled. "I don't get it," Mr. Ford said. "But I'm not the target audience." And he added sales and future orders have exceeded expectations. "So," he shrugged, "whatever works."

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