Some analysts have questioned the ability of On, which has fewer than 900 employees, to compete successfully in the long term against giants like Nike and Adidas. The US and German sports shoe and apparel makers have years of international experience and using sports stars to boost their products.
On, by contrast, has only recently turned profitable, while sales, though skyrocketing, remain modest compared with the giants. Revenues for the first half of this year leapt 85% to CHF 315.5 million ($344m), generating net profits of CHF 3.8m.
On’s lofty potential stock market valuation compares to the more modest $2-3bn of trendy eyewear brand Wasby Parker, which specialises in selling directly to consumers, or the $1.7bn of sports shoe maker Allbirds. Gap, a brand seen widely as in decline, but which still generates about $16bn of annual sales, was worth about $11bn. “What justifies On’s premium”, Yu asked.