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On Eyes Wider Reach, Retail Expansion

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On Holding AG, which filed its initial public offering last September, is making moves to establish a firm foothold as a global performance brand and broaden its reach among consumers worldwide through new distribution channels and a product assortment that stretches beyond premium running shoes. As it offers expanded footwear, apparel, and accessories in running, outdoor and lifestyle this year, On is opening international stores in Tokyo (next week), London and Zurich (summer) and striking strong distribution relationships with key global wholesale partners that will result in 1,000 branded On shop in shops worldwide. The retail group includes Nordstrom (20 more shop in shops), Harrod’s, and REI, key Foot Locker, and JD Sports locations (to reach a younger consumer set) and targeted running assortments in select Dick’s Sporting Goods and Public Lands (two locations) stores.

The decade-old Swiss company, impacted by supply chain constraints and COVID-19 restrictions across Europe hurting its top and bottom lines, reported a net loss equivalent to $200.6 million in the fourth quarter. Gross margin improved to 58.5 percent from 51.7 percent. Period revenues increased by 54 percent to in Swiss Francs to about $205.0 million with the direct-to-consumer channel growing by 77 percent and wholesale revenues rising by 39 percent to $ 114.1 million.

Sales were up by 101 percent in North America to rough equivalent of $143.1 million.

North American sales increased 97 percent in reported currency to approximately $439.2m in 2021 with revenue growth in the U.S. run specialty channel up 92 percent. Among six new running shoe models to debut in 2022 are the Cloud Vista for the outdoor market and the Cloud Monster, promising maximum cushioning to runners who demand it, on March 31. Merging performance, design and sustainability in apparel, there are more launches on the horizon that will include a women’s performance bra line.

With production capacity said to be back at 100 percent, supply chain isn’t expected to impact On’s operations during the second half of 2022. Nonetheless, the company is relocating about 10 percent of its footwear production to Indonesia by the end of the year, continuing to incur air freight costs necessary, and raising prices $10 a pair on 40 percent of its U.S. volume to help offset rising labor costs in warehouses.