Red carpets of the fashion week at the feet of our athletes, whatever their discipline, the market of sneaker is more than ever in turmoil. A cultural, commercial and even technological explosion which allows brands, although dead and buried for decades, to make a resounding comeback – we had mentioned about this the incredible revival of Salomon – and above all for new brands to carve out a place of choice in record time. All to the detriment of the hegemony of historical figures who are Nike, Adidas, New Balance, Reebok and many more.
Concerning these brands which clearly display the ambition to become caliph in place of the caliph, few of them are doing as well as On running. Born in the Swiss Alps, this brand of sneakers is originally the fruit of the vision of the former triathlete Olivier Bernhard who, once his retirement was confirmed in the early 2000s, set himself the goal of creating a shoe that would offer the sensation of ” run on the clouds “. In 2010, with the help of his associates Caspar Coppetti et David Alleman, On Running officially sees the light of day and directly displays the ambition to revolutionize the world of basketball. A first model is emerging, the On Cloudswhich immediately met with success.
The swiss master at the head of the bow
But above all it is the arrival of Roger Federer as a main shareholder in 2019 which will propel the brand well beyond Swiss borders. With his arrival, On Running succeeds in strengthening its brand image while attracting more professional athletes… and particularly in tennis – what a surprise – since the brand is today the main supplier of the American nugget Ben Shelton and the best player in the world Every Swiatek. And bref, On Running has established itself not only through its technological innovations, but also through its strategic collaborations. The brand has, for example, signed several partnerships in recent years with big – more established – names in fashion, such as Loewe for example, to create capsule collections combining technology and design.
Or the same strategy as that of Salomona brand, basically, ultra technical and dedicated to mountain sports, which, by occasionally associating itself with Palace or even to JJJJoundhas managed to establish itself as THE most popular sneaker brand hype from the moment. As a result, the turnover of On Holding exceeded one billion Swiss francs for the first time in 2022. As of December 31, 2023, On Running even predicted a net turnover of 1.76 billion francs and by 2026, management is counting on double that, or 3.55 billion. An undeniable commercial success… which the great Federer.
He thus explained to a journalist Complex in September 2023 that the objective when signing was above all to “ help a Swiss brand and create something cool. I wanted to do something different from a typical collaboration or partnership as an ambassador. Let’s make this make more sense. The stars have aligned. I never imagined an IPO or such growth. I just said to myself, “Let’s create things together and see where the journey takes us.” » ».
The company intends to exceed 60% profit margin but above all, it is aiming for first place among global high-end sportswear brands within the next two years. It is today the fifth largest sneaker brand in the world in terms of market capitalization. In short, the appetite of the Swiss ogre suffers no limits… his integrity… already a little more.
Success but at what cost?
Faced with such success, some insiders began to wonder how could the company grow so quickly while remaining so profitable? According to the Swiss magazine Pinch, On would simply benefit from the highest margins on the market between production costs and the sale of their shoes. In this article published last weekthe journalist Eric Breitinger recalls that establishing “ high margins are common in the sports shoe industry ” more than On « generally charges Swiss customers even more than its competitors”.
To prove this, he analyzed customs data – which concerns the period July/October 2023 – of 30 current models of On and compared them to 20 others from competing manufacturers. Result, the sneakers Roger Advantage of Ondeveloped in partnership with Roger, sell for 190 Swiss francs while they are bought in Vietnam for only… 17.86 Swiss francs. If the calculations of Pinch are correct, customers would thus charge more than ten times the factory price. Margins which explode even more for the brand’s most expensive model, the Cloudtilt Loewe – which we spoke to you about previously –. Pinch estimate that On pays 20.80 Swiss francs per pair to purchase from the Vietnamese company Freeview Industrial and sells them in Switzerland at a price of 445 Swiss francs, more than 20 times the factory price.
An appetite that seems indecent
Nowadays, On officially denies – still happily – any attempt to defraud its customers or exploit Vietnamese workers to guarantee record profitability. As repeated Alexandra Binispokesperson for the brand, to the media swissinfo.ch : « The figures published at the start of the week contained false information. We are committed to ensuring that our production partners pay workers a fair wage and we regularly carry out independent audits and training to ensure this ».
Another stink ball currently tainting the company’s reputation: it is now common knowledge that its managers awarded themselves abnormally high salaries once the 2021 financial year ended. According to the Swiss economic newspaper Finance and economicsthe three co-founders and the two co-general managers together earned 83 million Swiss francs in 2021. Marc Maurerthe current co-director general, had then received 16.9 million Swiss francs, which placed him at the time in third place among the highest paid executives in the sector after John Donahoe who officiates at Nike et Robert Greenbergthe boss of Skechers. Following the public outrage caused by these figures, executive salaries were reduced the following year. It’s up to them to find the recipe to get out, once again, of the media trap in which they have found themselves mired. A hint: this generally starts with paying your employees correctly.
2024-02-06 06:43:23
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