Earlier this month, two sneaker brands offered a bleak outlook for the once-hot category. Adidas, still struggling to get out from under a €500 million pile of unsold Yeezys, said it’s expecting its first annual loss in 30-plus years. Allbirds executives attributed disappointing sales to a misguided foray into activewear and said the brand would pivot from opening new stores to expanding its wholesale operations.
This week, we’ll hear from the brands that are partially responsible for those companies’ woes. Nike and On Holding both report quarterly results on March 21. Both have had a much smoother, if not entirely turbulence-free ride over the last couple years, often at the expense of their competitors.
Nike is fully leveraging its size to power through a host of problems that have dragged down its rivals. In China, it’s been among the most successful Western brands at shaking off the effects of the global dispute over the use of Xinjiang cotton, which Bernstein analysts attribute to the pre-crisis strength of its name there. Its pivot away from wholesale, while it may not have been as profitable as initially hoped, has given Nike the ability to shift its focus between sales channels as the economic outlook changes (such as when it needed to move extra inventory last year). And while it’s had its share of difficulties with brand ambassadors — toxic workplace allegations against the artist Tom Sachs are the latest — none are as valuable to the company as Ye was to Adidas.
On’s continued success can also be viewed in light of Allbird’s failings. The Swiss brand embraced wholesale from the start, betting correctly that it would be a cheaper way to acquire new customers. Its focus on tech-driven performance branding has also proven a more enduring lure for customers (and less easily copied) than Allbirds’ tech-driven sustainability branding. While not immune to shifting trends, and facing competition from brands like Deckers’ Hoka, On has managed to avoid the collapse in sales and stock price seen by digital-first rivals.
What Else to Watch for This Week
Tuesday
Nike, On Holding report quarterly results
Wednesday
EU releases final rules defining and penalising greenwashing
UK reports inflation data for February
US Federal Reserve releases interest rate decision
BoF holds its second Fashion Tech Summit in New York
Thursday
Ramadan begins
TikTok’s CEO testifies before US Congress
Bank of England interest rate decision
Friday
UK reports retail sales data for February
