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

Converse accounts for only 2.5% of Nike's sales. Last quarter, Converse sales contributed to a 20% decline in the company's sales. Since Elliott Hill became CEO of Nike two years ago, Converse has been a significant burden on the company's recovery efforts. In the most recent quarter, Converse sales plummeted by 28%, raising questions about whether Nike will continue to support the brand.

Converse's iconic Chuck Taylor high-tops have experienced a prolonged decline, with the shoe struggling to keep up with current trends. The brand's heavy, stiff design has become outdated, and Converse's overall sales have dropped by 44% in the latest fiscal quarter compared to the same period last year. Converse's issues stem from its overreliance on the Chuck Taylor model, which is now out of style.

The brand has been unable to innovate and adapt to changing consumer preferences, leaving it vulnerable in the competitive footwear market. While a few other shoe models, such as the Jack Purcell, have shown some success, Converse's sales have fallen below $1 billion for the first time since 2010. Analysts have expressed concern that Converse might become the first brand Nike has sold since acquiring it in 2003 for $305 million.

Converse's decline raises questions about whether Nike will decide to sell off the brand entirely. Nike's CEO, Hill, has expressed his intention to turn Converse's fortunes around, but the company has not yet outlined specific strategies to achieve this goal. Despite the challenges, some experts believe Converse still has potential, especially if it introduces lighter, more breathable designs.