Mbappe boosts On’s brand visibility, but hurdles to soccer success remain
Read a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
NEW YORK, Sept 18 : On Holding made a splashy entry into soccer on Friday by signing French star Kylian Mbappe, a move that raised the Swiss running shoe brand’s profile as it pushes into the sport.
But On faces difficulties in its bid to translate the high-profile partnership into a sales boost in the competitive soccer market. The brand, which is battling slowing growth in its key Americas market, is now tasked with doing what rivals have failed to accomplish: chip away at Nike, Adidas and Puma’s soccer dominance. Mbappe previously partnered with Nike for roughly two decades.
On, known for its distinctive “hollow pod” soles, missed estimates last month for second-quarter net sales, alarming investors about slowing growth even as it continues to take market share from Nike and Adidas. Its shares have tumbled about 40 per cent this year.
Still, the company’s price-to-earnings ratio of 18.7 values it slightly above sportswear rivals, according to LSEG data, underscoring high investor expectations for future growth. Data from M Science shows On gained market share in the three months through August, while Nike’s share losses persisted.
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Having expanded into tennis in partnership with star player Roger Federer, On is now looking for its next growth engine. Its push into soccer comes against a backdrop of an increasingly competitive sportswear industry, from both a product and marketing standpoint, said Mari Shor, senior equities analyst at Columbia Threadneedle.
And soccer is a tough market to crack.
“Football is one of the most expensive categories to enter and performance credibility cannot simply be bought,” said Jefferies equity analyst Randy Konik, adding that the Mbappe partnership signals that On needs to “spend harder to sustain growth.”
Adidas sponsored 14 national teams at this summer’s FIFA World Cup, while Nike and Puma outfitted 12 and 11 teams respectively.
In a statement, On cited its LightSpray robotic manufacturing technology, currently used for its running shoes, as an asset as it moves into soccer boots.
On declined to disclose the financial terms of its deal with Mbappe. But it said the structure includes both cash and equity components. Federer acquired a roughly 2.5 per cent equity stake in On, according to Forbes, when he left Nike to join the company in 2019.
SUCCESS STILL UNCERTAIN
US shares of On, which also brought in former France star Thierry Henry as director of its soccer business, dipped 0.3 per cent in choppy trading on Friday, a sign that investors are not sold on its high-profile soccer foray. The brand has endured a decline in the Americas, which accounts for more than half its revenue, as shoppers grapple with inflation and an uncertain economic backdrop.
Despite the publicity that Mbappe brings, “the question is whether the deal is worth the cost, which is undoubtedly high,” said Morningstar analyst David Swartz.
Analysts noted Under Armour’s partnership with basketball star Stephen Curry, which helped establish the company in the sport but failed to achieve the cultural influence or commercial scale of Nike’s Jordan Brand. The two agreed to separate in 2025. In Europe, Under Armour has also tried to gain a foothold in soccer, but the brand has struggled to compete with Nike, Adidas and Puma.
“We view this as a repeat of Under Armour’s partnership with Curry: a reminder that an elite athlete alone does not guarantee success in a category,” Konik said.
Still, bringing on Mbappe boosts On’s credibility in soccer, said Bruce Winder, an independent retail consultant. The move could spell further trouble for Nike, whose turnaround efforts appear to have stalled, he added.
Source: Reuters
Sign up for our newsletters
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
