Federer-backed shoe brand booms amid virus lockdowns

Bloomberg

For Swiss running shoemaker On AG, whose proprietary cushioning technology has attracted Roger Federer as an investor, the global coronavirus lockdowns had positive side effects.
Online sales more than tripled in the three months through May as consumers itching for a good workout but wary of gyms turned to outdoor running, according to Chief Executive Officer David Allemann. Demand has remained just as strong after brick-and-mortar stores started to reopen, signalling the trend may be here to stay even as gyms restart.
“The whole lockdown has been transformational for our consumers and our industry,” Allemann said in an interview. “This outdoor-running boom is really going to support our brand momentum.”
The brand may see another uptick as Federer, who became a shareholder of the Zurich-based company in November, unveiled the lastest On shoe, which he helped design, on Monday. That may help the underdog label compete with giants like Nike Inc, which has a line named after Michael Jordan, and Adidas AG, which sells Stan Smith shoes.
On’s shoes have hollow tube-like attachments made of rubber or foam on the outsoles that promise runners a soft landing, while locking firm when taking off — a patented technology called Cloudtec the company
invented.
“The Roger” is an all-white tennis-inspired sneaker made with faux leather endorned with Cloudtec instead of a heavy rubber sole. The line is limited to 1,000 pairs and comes with a price tag of $249.99.
The Swiss label has become one of the world’s fastest-growing running shoe brands since it was founded a decade ago. The privately held company doesn’t disclose ownership or financial details. It’s ranked No. 6 in the US running shoe category, with a 6.6% market share, versus 26% for Brooks, the largest brand in the $475 million market, according to researcher NPD.
“Performance running will be a real beneficiary in today’s Covid-19 world,” Matt Powell, NPD’s sports industry adviser, said in a report.
The shoemaker works with some 6,000 retailers worldwide, and is set to unveil its first big flagship store on Manhattan’s Lafayette Street by the end of this year, following two trial stores in Shanghai. Whether the company will add more shops depends on how the coronavirus pandemic changes consumer behaviour.
“We’ll observe in the next months what the retail landscape looks like and whether it makes sense to continue with this concept,” Alleman said.