The start of the year is bringing wild talk in the skateboarding shoe world and the skate scene might feel it the most.
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Word is that Nike could be thinking about selling Converse, the brand that has been lacing up skaters for decades.
A note from BNP Paribas analyst Laurent Vasilescu has everyone talking. He says the health of Converse is looking shakier than people thought.
According to reports, revenues are down hard with a drop of twenty-eight percent in the first quarter and another thirty-one percent in the second.
That is not just numbers on paper. Converse is dipping into negative earnings and margins are taking a hit.
Lower prices and higher costs are making the bottom line bleed and there is no quick fix in sight.
As we previously reported, things are not looking much better on the marketing side as the brand cuts Converse marketing by 44 percent despite the CEO Elliott Hill's turnaround promise.
Spending on getting Converse in front of people dropped forty-four percent compared to last year.
With Nike pulling back on promotion the brand is not getting the hype or visibility it needs leaving teams like the Converse skate crew scrambling.
The skate team has always been part of the culture that keeps Converse alive but if the company keeps cutting back it could be rough for riders trying to get exposure or sponsorships.
Nike has a long history of selling off brands it buys from Hurley to Cole Haan. Analysts think Converse could be next in that line.
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That would be a big shakeup for the skate and streetwear communities. A sale could mean new owners new direction or worse budget cuts that trickle down to the skaters who rely on the brand to support tours videos and contests.
Even though Nike put Aaron Cain a twenty-one year veteran in charge of Converse last year the numbers still show trouble.
Second quarter revenue was three hundred million dollars down thirty percent and management is signaling more challenges ahead.
For skaters this is more than corporate talk.
It could affect what boards shoes and gear get made how teams get funded and who gets visibility in contests and media.
The bigger picture is that the skate industry itself has been shifting. Big brands like Nike are reevaluating what is profitable and smaller brands or skater-owned companies are getting more attention.
If Converse gets sold or pulled back the space could open up for new players but the transition could be messy. Skaters who grew up riding Chucks might have to adapt fast or risk losing sponsorships and support.
The street is watching and the question now is whether Nike sees Converse as a core part of its lineup or just another asset to flip.