Fast Break for Chuck Taylor

Nike Inc. (Beaverton, Ore.) has entered the retro-shoe market by buying Converse Inc. (N. Andover, Mass.), which has sold more than 750 million pairs of its classic canvas-and-rubber “Chuck Taylor All Stars.”

Under the deal, Nike, the top maker of high-tech athletic shoes, will pay $305 million and assume certain Converse liabilities.

Nike overtook Converse as the dominant basketball shoemaker in the 1980s. After battling Nike and Reebok's surging popularity for nearly 20 years, Converse filed for bankruptcy in January 2001, shifting production from Lumberton, N.C., to Asia. Later that year, apparel-industry veterans Marsden Cason and William Simon bought the company out of bankruptcy and tried to rebuild Converse's reputation as a maker of top-of-the-line basketball shoes.

Last year, Nike had $10.7 billion in revenue, while Converse reported $205 million.

Nike spokeswoman Joani Komlos said Converse will operate as a separate brand within the company. Nike plans to pay for the deal with cash and assume Converse debt.

“Converse is one of the strongest footwear brands in the world with great heritage and a long history of success,” says Tom Clarke, Nike's president of new business ventures.

The deal, which remains subject to regulatory approval, would give Converse the backing and marketing depth to push its brand worldwide, while offering Nike a fashion niche it may have been missing.