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On Running seeks to fill the void left by Nike

Richard Collings
Mar 22, 2022
Foot Locker, spelled out in white lettering on a black backdrop, appears above a windowed entrance to one of the retailer's locations.
Photo: Jeffrey Greenberg/UCG/Universal Images Group via Getty Images

On Running, a fast-growing footwear brand, sees an opportunity to fill the shelf space left by Nike at retailers such as Foot Locker and Dick's Sporting Goods.

Why it matters: Nike's decision to focus more on a direct-to-consumer strategy has cut holes in distribution channels, but it's also created openings for retailers like On Running. Go deeper (<1 min. read)

  • Nike's move "clearly increases the opportunity" to win market share, co-CEO and CFO Martin Hoffmann tells me.

Details: The Swiss-based company, whose net sales grew 70% last year, is on track to become a top 10 U.S. sneaker brand this year, according to Matt Powell, a senior adviser at NPD.

  • The company will conduct its first pilot of On Running-branded sections within Dick's Sporting Goods in the second half of this year.
  • It's also formed partnerships with retailers such as Foot Locker and JD Sports.
  • "Our pilots really show that we are resonating with that younger customer (and) that they are demanding shoes like the Cloudnova," Hoffmann says.

Flashback: Foot Locker flagged Nike's scale-back in late February, a signal that sent Foot Locker's shares into a tailspin that day.

The opportunity: Losing part of Nike's business surely isn't a good thing for any company that hauls in significant sales from the iconic brand. But Powell of NPD says it may not be so bad.

  • For Foot Locker, it's a chance to ween itself off staple Nike products in exchange for high-growth DTC brands seeking physical retail distribution.
  • Comparable sales of non-Nike products at Foot Locker, for example, grew around 30% during the last quarter, the footwear retailer has noted.
  • In contrast, comparable sales of Nike-branded products declined.

The bottom line: Nike's move disrupted the industry but set the table for On Running and may, in the end, benefit both retailers and startups looking to break their way into the athletic footwear business.

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