Earlier this month, two sneaker brands offered a bleak outlook for the once-hot category. Adidas, still struggling to get out of a 500 million euro pile of unsold Yeezys, said it expects its first annual loss in more than 30 years. Allbird executives attributed disappointing sales to a misguided foray into activewear and said the brand would shift from opening new stores to expanding its wholesale operations.
This week, we’ll hear from the brands that are partially responsible for these 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 past few years, often at the expense of their competitors.
Nike is taking full advantage of its size to overcome a number of issues that have dragged its rivals down. In China, it has been among the most successful Western brands to shake off the effects of the global dispute over the use of Xinjiang cotton, which Bernstein analysts attribute to the strength of its name before the crisis there. Its pivot away from wholesale, while perhaps not as profitable as originally 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 has had its share of difficulties with brand ambassadors — toxic workplace allegations against artist Tom Sachs being the latest — none are as valuable to the company as Ye was to Adidas.
Wen’s continued success can also be seen in light of Allbird’s failures. The Swiss brand embraced wholesaling from the start, correctly betting that it would be a cheaper way to acquire new customers. Its focus on technology-driven performance branding has also proven to be a more lasting lure for customers (and less easily copied) than Allbirds’ technology-driven sustainability branding. While not immune to changing trends, and facing competition from brands such as Deckers’ Hoka, On has managed to avoid the collapse in sales and share price seen by digital-first rivals.
What else to watch this week
Tuesday
Nike, On Holding reports quarterly results
Wednesday
The EU publishes final rules defining and punishing greenwashing
UK reports inflation figures for February
The US central bank announces interest rate decision
BoF is holding its second Fashion Tech Summit in New York
Thursday
Ramadan begins
TikTok’s CEO testifies before the US Congress
Bank of England interest rate decision
Friday
UK reports retail sales data for February