Federer-backed On aims for faster growth in bid to rival Nike, Adidas

Swiss shoemaker On Holding AG plans to double sales to 3.55 billion Swiss francs ($3.85 billion) by 2026, targeting fast growth in China, as it seeks to become the world’s “most premium” sportswear brand. 

The Zurich-based company has ambitions beyond 2026 of pulling in more than 10% of its net sales from China, as well as from its own network of retail stores and from apparel products, according to a statement Wednesday. Those goals underpin efforts to expand sales of its running, tennis and training shoes and apparel by more than 20% annually in the back half of this decade while ratcheting up profitability even more.

The 2026 targets are greater than the company outlined in its IPO and are “an intermediate step in our ambition to build a much bigger company in the future,” Co-CEO Martin Hoffmann said in the statement. 

On is one of a few sports brands, along with Hoka and Brooks, that have posted dramatic growth in recent years, benefiting from the twin global trends of a greater awareness of fitness and acceptance of casual dress, while also eating into market share of veteran giants like Nike Inc. and Adidas AG. 

The smaller brands have gained foothold with serious runners and specialty running retail stores, taking advantage of their bigger rivals’ heavy emphasis on direct-to-consumer sales.

On, founded in 2010, initially gained a cult following in its home market and elsewhere in Europe thanks to its shoe’s distinctive tubular cushions on the sole and backing from tennis champion Roger Federer. Since its 2021 public listing in New York, it’s also rapidly built a consumer base in the US, the world’s biggest sports market. Until now, its China division has remained tiny compared to those of its bigger rivals. 

While On still sees room to grow market share in running, it’s also focusing on expanding in markets like China and building out its customer base in fitness and tennis. The company reiterated its goal of reaching net sales of 1.76 billion Swiss francs this year and at least 58.5% gross profit margin.