The athletic footwear market has seen a decline in revenues and unit sales in the U.S. in 2022, according to the McKinsey 2023 Sporting Goods report. Despite this, Swiss running-shoe company On has seen remarkable success, with revenues up nearly 70% year-over-year and adjusted EBITDA up 71%. On went public in September 2021 and predicts revenues will grow nearly 50% in 2023 to reach $1.9 billion.
The athletic footwear market has seen a decline in revenues and unit sales in the U.S. in 2022, according to the McKinsey 2023 Sporting Goods report. Despite this, Swiss running-shoe company On has seen remarkable success, with revenues up nearly 70% year-over-year and adjusted EBITDA up 71%. On went public in September 2021 and predicts revenues will grow nearly 50% in 2023 to reach $1.9 billion.
On’s claim to fame is its innovative CloudTec design that promises runners the feeling of “running on clouds,” combined with its rock-solid commitment to sustainability and the circular economy. The company uses the same technology-driven, innovative approach that powers its design to sustainability. Its environmental mission is “to make high-performance products with the lowest possible footprint, engineered for circularity, and with preferred materials, manufacturing methods and distribution models.”
Now, the company is moving forward with an even more innovative approach to circularity: its Cyclon program introduces a circular subscription-based distribution model for high-performance running shoes and t-shirts, all made from castor beans. Its tagline is “Run. Recycle. Repeat.” because it is the “running shoe you’ll never really own.”
Subscribers pay $30 per month and can get a fresh pair of running shoes whenever needed, sending the old ones back to be recycled. At the price, a six-month subscription works out to total the average industry price for a high-performance running shoe. So far, the company has signed up several thousands of runners in the program, with more men than women picking it up.
The Cyclon program has delivered added benefits by providing new insights into its customers’ needs and behavior. It identified two primary use cases among Cyclon subscribers. One group is convenience-driven, wanting to get a new pair of shoes whenever needed. And this group of runners is tied to their shoes. The other group of Cyclon customers is motivated by its sustainability promise and the drive to reduce their footprint on the planet.
Sources: https://www.forbes.com/sites/pamdanziger/2023/04/04/on-the-1-billion-swiss-running-shoe-company-declares-cyclon-its-sustainability-incubator/
