On April 14, more than 500 Converse employees will descend on downtown Boston to take up residence at the brand’s new state-of-the-art global headquarters.
The facility, which measures more than 186,000 square feet, is the result of a redevelopment project of a formerly dilapidated building on the waterfront at Lovejoy Wharf. Converse President and CEO Jim Calhoun recalled that when he first saw the space, “it was a run-down building with a 100-year-old wharf that had crumbled into Boston Harbor,” he said. “And pretty much all that was operating in this big building was a methadone clinic.”
But Calhoun and brand VP and GM Geoff Cottrill saw potential in the space, and they had good reason. “In many respects, it represented our company, which was bankrupt [a little more than a decade ago] and now sits in the position we’re in,” Calhoun said. “We thought, this building that’s been unloved for a while, we can find the beauty in it and make it the envy of a lot of people.”
Indeed, Converse has come a long way since it was acquired by Nike Inc. in 2003 for $305 million. For the first nine months of fiscal 2015, the brand’s revenues totaled more than $1.5 billion, an increase of more than 20 percent from the year-ago period.
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And along with the corporate move, brand execs have been busy with other initiatives, including unveiling Converse’s largest ad campaign, developing its global presence and investing in digital capabilities.
Calhoun explained that the move from Boston’s suburbs to the city is both a celebration of all that’s been accomplished so far and a bid to position the brand for the future.
Here, the CEO outlines his strategy for leading Converse.
Why did you decide to move to the new headquarters?
JC: It was already on the docket [when I joined the company in 2011] because the space we were in at the time was designated for a different use. When I joined, the search had just begun and, most naturally, the idea was, “What’s the least disruptive move we could make?” But we also had the luxury of saying, “This isn’t something you do everyday. Let’s make sure we make the right decision.” Ultimately, we made a decision that a more urban environment seemed to fit the brand better.
Were there other factors?
JC: We also looked at talent and our ability to attract it. We have an incredibly talented organization today, but when you look at a move like this, it’s a 10-, 20-year-type decision, and a number of us asked ourselves, “How do we put ourselves in the best position to acquire the talent of tomorrow?” I felt like being in Boston was almost non-negotiable if [we wanted] a fair shot at attracting the kind of talent and young people [we’ll need].
Tell us about the bells and whistles of the new space.
JC: First of all, the building sits right on the water, so the views are spectacular. And if you walk outside, we’ve built a wharf where our employees will be able to sit and have lunch. There will be water taxis going to and from Logan Airport and throughout Boston. We’ll open our second Rubber Tracks recording
studio there, where we’ll work with local Boston and New England artists. We will have a world-class fitness center that we’ve done in partnership with Nike. We’ve tried to make it a more open, collaborative environment to [enable employees to] think and act a little differently.
Earlier this month, Converse launched the “Made By You” campaign, which features Chuck Taylors collected from global icons such as Patti Smith and Andy Warhol. What have the results been?
JC: It has exceeded our expectations [in terms] of consumer engagement and the number of people who are shooting their own stories and sending them in or posting them. We’re not a big, loud, in-your-face brand seeking hundreds of millions of
impressions with big media budgets. So this is a bit of a departure.
It’s your biggest campaign ever. Why make that investment now?
JC: It’s an interesting time at Converse. We’re making a lot of changes. Over the past decade, what we’ve been able to do in partnership with our parent company is to define this brand’s identity and help expedite its transition from an athletic brand to a label that consumers recognize as being about self-expression and celebrating individuality.
Aside from the move, what other changes are under way?
JC: One of the interesting things we’ve been doing for the better part of a decade with Nike is catching up so we can move the company forward, doing everything from infrastructure to operating systems to taking back licenses overseas, starting with our key markets. You don’t want to invest in digital if you don’t control your brand around the world. You don’t want to compete with licensees or business partners in the marketplace. You want to have a seamless, holistic experience with consumers. Now that we’ve taken these businesses back, we’re trying to have a world-class digital experience.
Will digital retail expansion be a bigger focus than brick and mortar?
JC: It will, because the power of it outweighs opening X number of stores. We’ll continue to invest in [stores] around the world because they’re an important touchpoint
to tell a good Converse story, but the future is digital. In dollar terms, [digital will be] a bigger investment for us than brick and mortar, but it’s not an either-or. It’s both, with digital perhaps having a bigger impact.
What are some of your key markets?
JC: There are the traditional places, like Western Europe, where the brand has had a lot of brand awareness and the Chuck Taylor continues to be a big part of the scene. China
is an important market for us. And
Brazil is incredibly [critical]. Our filter may be a little different. We certainly look at economic factors like GDP and size, but we also look at places where there is a large population of young people, where interesting creative things are happening.
On the product side, what can we expect to see this year?
JC: One of the great blessings is how well we’re known for the Chuck Taylor. We’ll sell in excess of 90 million pairs of Chuck Taylor product this year, which translates into 2.5 pairs every second of the day. But one of the great challenges is how do you take something that has been so loved for so long and make sure it doesn’t become dusty? You’ll hear more from us in the coming weeks about how we’re going to specifically accelerate this amazing franchise called Chuck Taylor. And we think there is a huge opportunity in apparel. We have such brand affinity. [The question is], what can we bring to the apparel space that our consumers aren’t getting from other brands? I’d like us to be recognized by consumers as more than just the company that brought you Chuck Taylors.
You’ve been aggressive about defending your design trademarks in the courts. Is that tougher to do today?
JC: It’s an interesting time in terms of what’s flattery, what’s borrowing and what’s stealing. As it relates to us, though, I don’t think it makes it harder; it just requires more effort. At the end of the day, it comes down to a matter of right and wrong. Most consumers and most companies understand the difference, and most of us are seeking original ideas and to rigorously protect original ideas. We’re certainly up for the challenge.