ZURICH — In a bold challenge to Nike's dominance, Swiss sneaker company On is rapidly gaining ground in the premium athletic wear market. With its unique shoe designs and innovative manufacturing technology, On has seen its net sales grow in 11 out of the past 13 quarters, with a staggering $865 million in sales reported in its most recent quarter.
Since going public in 2021, On's stock price has soared, outpacing its competitors and establishing the company as a major player in the global sports footwear market. Meanwhile, Nike, the industry leader, has faced stalling growth, with sales declines in two of its last four quarters. Adidas, another major competitor, has also faced challenges, including the end of its partnership with Kanye West.
On's success can be attributed to its focus on performance and style, with its running shoes featuring large hollow pads in the sole for extra cushioning. The company's use of a revolutionary spray-on technology allows for rapid production, with a pair of sneakers taking just minutes to make. This efficiency has enabled On to expand its product line and reach a wider audience, including partnerships with athletes like Roger Federer and celebrities like Zenaia and FKA Twigs.
However, On faces its own set of challenges, including the threat of tariffs proposed by the White House, which could raise prices and impact the company's growth. With 90% of its products manufactured in Vietnam, On is vulnerable to trade tensions and potential tariffs. Despite these challenges, the company remains focused on innovation and expansion, with plans to double its store count from 53 to 100 in the coming years.
As the sports footwear market continues to evolve, On's rapid rise poses a significant threat to Nike's dominance. With its unique products and efficient manufacturing technology, On is well-positioned to continue its growth and challenge the industry leaders. Whether On can maintain its momentum and overcome the challenges ahead remains to be seen, but one thing is clear: the Swiss sneaker company is a force to be reckoned with in the world of premium athletic wear.
As the dust settles on the ongoing trade tensions, one thing is clear: the impact of tariffs on the sportswear industry will be felt by consumers. With Adidas warning of price hikes for its US products and other brands likely to follow suit, the days of cheap, imported sneakers may be behind us. The idea of moving production domestically, a key goal of the Trump administration, seems unlikely, particularly for labor-intensive items like sneakers.
Experts agree that the cost of labor in the US is prohibitively high, making it difficult for companies to justify the expense of relocating their supply chains. As one industry insider noted, "We are not going to make sneakers in the US. You can't move your supply chains overnight. We just don't really have the ability." Instead, companies like On may opt to pass on the cost of tariffs to consumers, relying on their premium brand reputation and pricing power to absorb the blow.
While some brands may be better equipped to weather the storm, the overall outlook for the industry is uncertain. As analysts predict, "tariffs will just be passed on to the consumers over time." This could have far-reaching consequences, not just for the sportswear industry, but for the broader economy as well. As the trade landscape continues to shift, one thing is certain: the era of cheap, imported goods is coming to an end, and consumers will be the ones footing the bill.
In conclusion, the tariffs imposed on imported goods have sent shockwaves through the sportswear industry, with companies scrambling to adapt to the new reality. While some brands may be better positioned to withstand the impact, the ultimate cost will be borne by consumers. As the industry navigates this uncharted territory, one thing is clear: the future of sportswear will be shaped by the complex interplay of trade policies, labor costs, and consumer demand. Only time will tell how companies will respond to these challenges, but for now, it seems that the days of cheap sneakers are behind us.
