From his office in Converse’s global headquarters, Jim Calhoun has a view of the rolling hills of northeastern Massachusetts. The brand has made its home in the area — once the heart of the footwear manufacturing world — since it was founded in 1908.
But now, Calhoun, who took over as president and CEO of the Nike Inc.-owned label in 2011, is ready to make some serious moves.
In early 2015, Converse will open a new headquarters in Boston’s evolving North End, a change that reflects the executive’s ambitious vision for the brand.
Already, a product overhaul is in the works: The back-to-school collection, now at retail, provides clear evidence of Converse’s priority to be a brand made for, and inspired by, artists.
The b-t-s line features classics reimagined in new shapes, such as platforms and flatforms. Converse also is raising the fashion ante through a high-profile collaboration with fashion house Maison Martin Margiela, launching this week. The capsule collection features the brand’s iconic Jack Purcell and Chuck Taylor All-Star styles covered in the design house’s signature white paint.
“We have hit on a sharp point for our brand, and that has to do with our relationship with the creative community,” Calhoun told Footwear News in an exclusive interview. “You [are seeing] some of the first stages of that self-discovery.”
The CEO’s office has a full wall dedicated to framed photos of things and people that inspire both him and the brand. But tucked in among the pictures is a reminder of the past Converse is actively stepping away from: a framed photo of Calhoun’s father, also named Jim Calhoun, the legendary University of Connecticut basketball coach, playing in his own pair of Converse. Basketball put the brand on the map, but the label’s new focus on the artistic world has meant shuttering its performance basketball line.
“These might be some of the first seasons in over a century that Converse hasn’t released a performance basketball product,” Calhoun said.
Last year, the brand reported sales of $1.4 billion on the back of 9 percent growth. And market watchers said the changes should help propel further growth. “They were smart to jettison performance basketball — that really isn’t their forte,” said Matt Powell, an analyst with SportsOneSource. “And every generation has its version of kids wearing Ramones T-shirts, and part of [Converse’s] magic is connecting with that antiestablishment feel.”
“They have great new ideas and quite frankly, they needed to expand. It’s time to have some different ideas,” said Ken Hicks, president, chairman and CEO of New York-based Foot Locker. He added that looking at the business through a new lens could be profitable. “The other thing they’re doing well is the focus on music. With Nike, they’ve got the sports world pretty well covered, but music will give [Converse] a way to reach that [target] kid.”
Calhoun said he’s feeling upbeat about the future.
“We’re in a happy place, a really good spot where we have had a nice run of success, yet we are driven by the opportunities that are in front of us,” he said. “We’re a brand that after 100-plus years of history is finally starting to come into its own.”
How has Converse evolved since you came on board?
JC: About two years ago, when I got here, I said, “Tell me what your mission statement is.” I was expecting someone to pull out a little pamphlet that said, “This is Converse for new employees.” And nobody did. When I probed, I got a mixture of answers. Mission statements can be overly trite, but when we started talking about what our mission was and who our consumer was, everyone went, “Aha, now I know what to focus on.” So that was incredibly powerful. We launched this brand conviction of “Converse believes that unleashing the creative spirit will change the world.”
With 100-plus years of history, you clearly have a deep back catalog. How do you balance that with keeping the brand modern?
JC: You lock the archives. I say that somewhat jokingly, but in all honesty, it can be a blessing and a curse. You spend a lot of time trying to extract your DNA. Rather than pull out an old model, you try to understand what it was about that product that resonated with consumers past and present. And we remind our designers of a couple of things. When the people who created the Chuck Taylor created it, there were no archives. So you remind them that it’s not what you borrow from the archives, it’s what you leave as the next archival product that matters.
How far away from those classics can you get?
JC: If cowboy boots were really popular, I can promise we’re not making a Converse cowboy boot. But we’re going to push the needle a little bit. Part of being creative is putting yourself out there and trying some things. We are not afraid to fail as a brand. [A number of] bankruptcies over a century will give you some thick skin.
Your b-t-s line is one of the first to incorporate the Converse insignia on all the products — even heritage styles that haven’t historically carried them. What was the motivation there?
JC: We have a series of marks that have been used and some familiar icons and logos, but they haven’t necessarily been used across all our different products. We’ve gone to Converse [name] branding on all our products. It starts to put more meaning into the name Converse versus into an item. But we don’t see ourselves as a billboard brand. Consumers like that it’s Converse, but they also like that they aren’t a billboard for anyone but themselves.
You decided not to release a performance basketball line for the first time last spring. How did that feel?
JC: It was a relief. We had been so afraid to let go — of basketball, in particular — that we spent a lot of effort trying to remain relevant [there]. It was a rediscovery of [the fact] that our history hasn’t just been about our relationship with the sports world.
Was that product competitive?
JC: I don’t want to say product is the easy part, but when you’ve got Nike as a parent company and you can tap into the world’s greatest basketball footwear experts, it’s not the hard part. Actually having it be meaningful to a consumer? That’s where it starts to get hard.
You’ve played in performance skate since the launch of the Cons line in 2009. Will that go away as well?
JC: We’ll still maintain performance skate, but performance skate will [just] be part of Cons. You’ll see basketball- or court-[inspired] silhouettes, you’ll see running silhouettes, but we won’t be conveying a performance message. That’s not us. We will leverage the Cons branding and labeling [with] the star chevron, which for us is sort of synonymous with our active heritage. We have product in the marketplace, but you’ll start to see us communicate in a much bigger way starting this fall.
While shifting away from performance, you say you’re targeting the creative community. Who is that group exactly?
JC: It’s not just people who paint for a living or people who, you know, starve for a living. There’s a creative spirit in most, if not all, of us. We’ve been fortunate in our timing. The world of creativity [is being celebrated], whether it’s DIY or HGTV or “High School Musical” and “Glee.” We see creativity now as a real, meaningful consumer currency.
Do you see musicians and artists forming the bulk of your business going forward?
JC: The people who build their life around creative expression [are] our elite athlete, our LeBron James. We want to make sure we have a very genuine, authentic relationship with them. [But] it’s not a group, frankly, that spends a lot of money. The bigger commercial opportunities are what we call the creative connectors. Those are the people who look to the creative community for inspiration and express themselves through fashion. They’re the first to know about something. They take ideas and make them trends.
What demographic does that cover?
JC: There is something pretty cool about seeing a 70-year-old man or woman wearing Chucks, but our sweet spot is going to be the 14-to-18 year old. And if you cast the commercial net, I’d say we are an 8, 9, 10 year old up to probably a 35-year-old’s brand. But it’s the state of mind and the endless possibilities of that [younger] mind space.
How do you reach that group with product?
JC: We are learning about that. The core creative will tell you [about the classic products], “Don’t change a thing.” The creative connector wants something that might have a similar look [to heritage pieces], but they want it to reflect the latest color palette and they want it to reflect the latest trend, whether that’s burnishing and giving it a retro look, or studding it to pick up on a certain theme emanating from rock ’n’ roll.
Your mandate seems very different than Nike’s. Does that make it difficult?
JC: When you see the Nike portfolio and how that’s changed in the last 12 to 18 months, it’s been on people’s minds: “Why did Nike dispose of this company and keep these [other] companies?” [Edit note: Nike sold both Cole Haan and Umbro last year.] And you’re right to say that if you were to look purely through the sports lens, you might not see the natural fit. [But] what I would say is that we have a lot in common from the standpoint of we’re both brands that embrace and try to contribute to youth culture. Nike does it through a sports lens and we do it through a creative lens. The kid who plays sports isn’t not listening to music or painting or acting in the school musical. There are millions of consumers who have both Nike and Converse in their closets.
What benefits do you gain from being part of a large company?
JC: There’s obviously the scale and leverage. The scale piece, we probably take more advantage of because they’re bigger than we are, [but there’s also] talent. We have a lot of people who go back and forth. Spending time at Converse makes people better at Nike and vice versa, because you get a little different perspective into the minds of today’s kid.
How active is Nike in your day-to-day business?
JC: I’ve jokingly defined it as sort of like having the best in-laws. They’re there when you need them and they never really stop by unexpectedly when you don’t want them to.
Nike has talked a lot about the need for manufacturing innovation. How does that play out in your business?
JC: The [uncertainty about and rising costs on] the manufacturing side of things, that’s not going away. It’s not just that it’s a bad year for cotton, or that the Chinese middle class is emerging and [demanding higher pay]. The old way of doing things [doesn’t work anymore], but [fixing it] is not as simple as robots and innovation. As a company that has been making similar products in similar ways for a long time, that’s how the Nike partnership is extremely helpful. They really are constantly pushing how we can make great products in a better way for the planet, for our own business, for the consumers.
On the retail front, you opened your biggest store in June in San Francisco, bringing your door count to 79. How do you balance your own stores with wholesale growth?
JC: We’re trying to be a consumer-led brand. Obviously, when you look at our own controlled retail, it’s the most expensive, but it’s the simplest way to do that. We use our owned and operated stores as a mechanism to see how we can develop a deeper relationship and then we try to translate that to our retail partners. I remind our team — and myself — that I’ve never heard a consumer say, “I’m going wholesale shopping today, or I’m going to do some digital browsing or some direct-to-consumer buying.” The kids we are talking about are multichannel consumers, so we are taking a multichannel approach and investing behind all of those.
In January, you announced that Converse would relocate from North Andover to Boston’s North End. Why do you want to move into the city?
JC: The [new headquarters] has been sort of my baby for two years. [Our lease was expiring and] I had inherited a ticking clock. My feeling was, if you’re going to move a world headquarters, you’ve got to get it right. So we started having a conversation about the talent we needed and that we’ll need in the future. And we want a little grime, a little grit — preferably an established music club that smells of beer. That’s what we want. So [moving into Boston] was kind of a no-brainer.
What is your outlook for the rest of the year?
JC: If you’re [in charge of] a truly global company and all the markets seem to be in good shape, panic. In 20 years of working for global companies, I’ve never seen that. I don’t wish for turmoil, [but the changing international picture] keeps you on your game, it keeps you sharp, it keeps you forward thinking. This job will never get boring.