>BTW- Champion and Russel make NFL uniforms.
I've since found out that Reebok now has the NFL contract.
>older related story
Reuters
Nike Seeking More Brands After Converse?
Sunday October 17, 8:31 am ET
By Michael Kahn
SAN FRANCISCO (Reuters) - With their simple design, rubber soles and canvas tops, Converse's Chuck Taylor All-Stars have long set the standard for retro cool -- a counterculture brand embraced by rebels from James Dean to Kurt Cobain.
So Nike Inc.'s (NYSE:NKE - News) decision not to mess with a classic when the company bought Converse last year came as welcome relief to sneaker fans and a pleasant surprise to investors and analysts who have watched it stumble when it tinkered with past acquisitions.
And with Converse helping to drive up sales, industry watchers say Nike is likely to duplicate this success by acquiring other brands.
John Horan, who publishes the trade magazine Sporting Goods Intelligence, lists youth sporting goods company Burton and outdoor clothing retailer Patagonia as two possibilities.
In a mature market, the world's biggest athletic shoe company needs new brands to boost sales, he said.
"Burton would be a fantastic fit because it would get them a terrific platform in that Generation X sports arena," Horan said. "They would love to get their hands on Patagonia because Nike has an outdoor division, but it has never really gotten the credibility in the specialty market."
To diversify its product offerings, Nike paid about $305 million for the nearly 100-year-old Converse. So far the bet has paid off.
For the quarter ended Aug. 31, sales from the company's non-Nike brands grew 64 percent to $434.5 million, with Converse making up about three-quarters of that amount. Total revenue rose 18 percent to $3.6 billion, with Converse contributing four percentage points of that increase.
"The fact they've got this under their belt and they probably did pretty darn well with it gives them a little bit more confidence to think about doing something bigger," said analyst John Shanley of Susquehanna Financial Group.
"They certainly have the financial resources to accomplish that not only here in the United States but also in terms of potential international deals," he said.
LEARNING FROM MISSTEPS
Nike spokesman Scott Reames said the company is always assessing potential opportunities, but he declined to discuss specifics of its acquisition strategy.
However, Horan said Nike has talked with Burton and Patagonia about buying the brands that target young shoppers in the hip-fashion and specialty outdoor clothing markets.
"The Converse acquisition will definitely lead to more acquisitions, if nothing else because this is the way you grow," he said.
Already Nike's share of the U.S. athletic-shoe market is more than twice that of each of its largest rivals, Reebok International Ltd. (NYSE:RBK - News) and Adidas-Salomon AG ADSG.DE>.
Nike's success with Converse only came after missteps such as efforts to mold dress-shoe maker Cole Haan and ice hockey equipment company Bauer into their parent's own image in the early 1990s, analysts said.
Nike took a different tack with Converse by keeping a management team that originally bought the company out of bankruptcy and knew the brand.
"In both those situations, they basically tried to turn Cole Haan and Bauer into little Nikes, and it never got off the ground," Horan said. "In the case of Converse, they learned to leave the thing along and let it be its own company."
More importantly, Converse has not cut into Nike sales because the brands target different customers. Nike learned this lesson the hard way when it launched its own hockey brand at the same time it bought Bauer.
"They actually came out with line that competed head to head with the Bauer product, which was kind of a nutty thing to do," Susquehanna Financial Group's Shanley said.
Nike spokesman Reames said the company learned from its past acquisitions. "What we did in the mid 1990s is not where we are now," he said.
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