In full expansion, On has set its sights on sales of over €3.5 billion by 2026

A visit to the On brand’s new flagship store in Paris, which opens on November 17, a 250-square-metre space at the Marché Saint-Germain in the 5th arrondissement, gives an idea of the very strong ambitions of this Swiss brand. Created just thirteen years ago by Caspar Coppetti, Olivier Bernhard and David Allemann, On has established itself season after season as a credible challenger to the dominant sports and lifestyle brands of the last century.

“The On brand has never been so strong and we have never had so much reason to be optimistic,” says Caspar Coppetti, chairman of the board of directors, in an exchange with investors at the presentation of the quarterly results for the NYSE-listed brand. “This is a pivotal moment in our history as we successfully transform ourselves from a challenger in the running category to the segment leader, but also from a running brand to a multi-sport brand and from a wholesale-oriented model to a true multi-channel brand and, finally, from a footwear brand to a sportswear brand.”

Of course, the new shop in the French capital, which combines natural materials such as wood and terra cota-coloured rock with grey steel racks, is all about running, as are the thirty or so stores under the brand (26 by the end of September) already established around the world, in London, Berlin, Miami, New York and Shanghai.

For On, running shoes are still at the heart of its offering, with a wide range of running and trail shoes available in its shops, to meet the needs of all kinds of runners. But as we look further into the space, we can see the prospects for On’s future.

In terms of footwear, the range is not limited to running. The brand has also launched an offensive in other categories. Since tennis champion Roger Federer acquired a stake in the brand, it has also been building a tennis offering, supported by sponsorship from international sportsmen and women.  There are also a large number of lifestyle products, under the Move On umbrella, with sneakers inspired by running but with more of an urban feel. This is an offer that the brand has been offering for some months now in mass-market networks such as Foot Locker and JD Sports.

There is plenty of room for growth. While On has built its reputation in specialist shops, its more mainstream offering is now widely distributed. At the end of the year, its founders were forecasting a presence in some 10,000 outlets worldwide, including 350 Foot Locker and some 338 JD Sports.

Above all, all these lines have a textile counterpart, which makes up a large part of the shop’s offer, with t-shirts, shorts and leggings, as well as fleeces, down jackets with or without sleeves, windbreakers and trousers.

“Today, this represents less than 10% of our sales. Our partners follow us in footwear, but we want to grow this category,” explains Bianca Pestalozzi, director of the brand in Europe, whom we met in Paris. “We think there is potential to reach 20% in textiles.”

To achieve this, the brand will rely on showcasing its items in its shop network, notably with the marketing of its first pieces in early 2024 incorporating its CleanCloud technology, which works to capture carbon emissions, and is moving forward with partners such as JD Sports.

For the time being, however, footwear is the brand’s main growth driver. The success of its products, combined with developments in its multi-channel strategy, has enabled On to post growth of almost 47% (58% at constant exchange rates) in its latest quarter to the end of September, compared with the same period last year, to reach 480 million Swiss francs (498 million euros).

The brand claims a jump in direct sales of almost 55%, driven in particular by its shop openings, which now account for 34% of its business, while wholesale sales, up by almost 43%, are worth 316 million Swiss francs.

By geographic region, the Americas are the leading market, with growth of 60% to 295 million Swiss francs over the quarter. The Europe – Middle East – Africa region is worth 144 million Swiss francs, up 20%, while the Asia-Pacific region is up 71% to nearly 42 million Swiss francs. The company intends to see this momentum continue. Its footwear category recorded overall sales growth of 47%, accounting for CHF 457 million of its CHF 498 million turnover.
 
“By 2026, we plan to double our sales to 3.55 billion Swiss francs, have a gross margin in excess of 60% and increase our adjusted Ebitda margin to over 18%. None of this will be easy, but we are highly motivated by what lies ahead.”

In order to achieve its objectives, and compete with strong players in the market such as Mizuno and Asics, as well as overtake Brooks and Hoka, the On team is focusing on several areas. “We will continue to focus on running and aim to significantly increase our market share among runners. Innovation will continue to be at the heart of our strategy, which is based on credibility in performance and responsible impact,” explains Marc Maurer, the company’s co-CEO.  With its weekly community events and the chance to try out the brand’s new products, the Paris flagship should provide a great platform for observing these advances.
 
“Our second focus is on investment,” says the head of the Swiss company. This starts with our commitment to making our multi-channel distribution even more effective. We are going to significantly increase our own retail presence so that it makes a greater contribution to our business. Finally, we will continue to expand our footprint in China at a rapid pace. We will focus even more on establishing On as a true sportswear brand known for its head-to-toe silhouettes in all our existing and new categories.”

With such intentions, there’s no doubt that giants Nike, Adidas and Puma are keeping a close eye on On.