Nike snatches NBA champion Shai Gilgeous-Alexander from Converse
Under the deal, the player – who has been named the league’s MVP for two years running – would receive a cheque for 15 million a year
Converse’s biggest basketball star is switching teams and moving to Nike. Shai Gilgeous-Alexander, point-guard for the OKC Thunder and this year’s league MVP for the second consecutive season, is set to join Nike’s flagship team, in a move that further strengthens the group’s leadership in the world of basketball. The deal is reported to be worth 15 million a year to the player, on top of the 285 million from his four-year contract with the OKC Thunder.
This is a case of internal competition, given that Converse was acquired in 2003 by the Nike group in a deal worth 305 million dollars. Founded in 1908 in North Andover, Massachusetts, by Marquis Converse, the company had gone into receivership in 2001 and, the following year, had generated a turnover of just $205 million, compared with $10.7 billion for its then-rival Nike. Today, the brand famous for its canvas trainers is facing a new and challenging phase.
Converse’s challenges
The news of the basketball star’s departure represents a new setback on Converse’s road to recovery, as the company is set to record its worst annual sales figures in the last fifteen years. The brand’s decline is complicating the relaunch plan for the entire group initiated by Nike’s CEO, Elliott Hill, who has been tasked with reversing the growth trend and strengthening the positioning of the various brands in the portfolio.
In recent months, Hill has embarked on a major reorganisation of Converse, appointing a new brand manager and overhauling the cost structure through staff cuts and reductions in advertising expenditure. This strategy is aimed at putting the brand back on a path to sustainable growth, but has so far failed to deliver the desired results.
A couple of months ago, incidentally, rumours had circulated that Authentic Brands Group was interested in acquiring the brand, but speculation about a possible sale had been denied by Hill himself. Now, this blow to Converse’s portfolio of brand ambassadors has reignited speculation that the brand could split from the group in the near future. The decision to move Gilgeous-Alexander from Converse to Nike takes on particular significance because the Canadian player, also known by the acronym SGA, was one of the cornerstones of the relaunch strategy for the historic brand.


