Sep 16, 2021 - Economy & Business

IPO for shoemaker On a sign of growing demand for athleisure products

Photo of a group of people running in the streets in shorts and T-shirts
Runners in front of the New York Stock Exchange this week. Photo: on-running.com

Investors rushed to buy shares this week of running shoes company On in its stock market debut, amid new signs that consumer spending remains resilient.

Why it matters: Apparel sales rebounded earlier this year as the economy reopened — and buying athletic apparel, especially sneakers, is one pandemic habit that’s not dying out.

  • Shares of Switzerland-based On started trading close to 50% above the IPO price, which put the value of the company at more than $6 billion.

Flashback: Brooks, Puma and Hoka were among the top performing running shoe brands during the early months of the pandemic last year, according to the NPD Group.

What they’re saying: There’s been “strengthening demand” for athleisure products and running shoes and sneakers because people are now getting back outside their homes, says Brian Nagel, managing director at Oppenheimer.

  • It's a continuation of the running boom trend that began with the start of the pandemic, he adds.

The big picture: As consumers now have the disposable income to spend more, they may be more willing to pay up for products that are “even more fashion forward, durable, and performance-driven,” says Nagel.

  • On, specifically, has ranked among retail's hottest running brands, Mitch Kummetz, senior analyst of footwear and apparel at Pivotal Research, tells Axios. 

Watch to watch: Allbirds is set to start trading on the Nasdaq next.

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