Premium Swiss athletic brand On Running has warned that UBS’s acquisition of rival Credit Suisse risks limiting choice for start-ups in the country when they eventually seek to list.
Both UBS and Credit Suisse underwrote On Running’s equity when it launched its initial public offering in 2021. The company has gone on to become a New York-listed global fitness brand whose running shoes and kit are popular with young professionals and professional athletes. On Tuesday it reported annual sales of more than £1bn for the first time in its history.
However, the company’s co-chief executive Martin Hoffmann said he was concerned that the UBS takeover of Credit Suisse, orchestrated by the Swiss government on Sunday, would lead to a lack of choice and competition for local companies wishing to list in the future.
“I think we need to look at the environment in Switzerland carefully,” he added. “As a young brand back in the day we benefited a lot from having two banks to have the competition, but also the options.”
On Running reported sales growth of 69 per cent to SFr1.2bn ($1.3bn), with pre-tax profit of SFr78mn for 2022.
“We clearly see that running is hot at the moment,” said Hoffmann. “At the same time wearing athletic shoes and apparel in a daily environment is a clear trend that On is benefiting from,” he added in a nod to the city bankers who style the performance shoes with suits.
Hoffmann, whose trainers typically sell for between SFr200 and SFr300, argued that the cost of living crisis in Europe was pushing more people towards running as a cheaper alternative to other forms of exercise. “In the end, running is one of the cheapest ways to do sports compared to a gym subscription or bikes. Even in an economically difficult environment running is a sport that is growing.”
On Running has also expanded its reach into tennis, with former world number one Roger Federer helping to design a range of tennis and casual shoes and becoming a brand ambassador.
It also announced a sponsorship deal with the women’s number one player Iga Świątek, who will be “head to toe in On Running” when she plays at Wimbledon this year.
On Running has 15 stores in China, which it plans to increase to 20 by the end of the year, and its London flagship outlet opened in February. More than half of sales come from North America, with just under a third from Europe.
It was valued at $7.3bn when it listed in New York but the group’s share price has since fallen by almost half. It was trading at around $22 per share on Tuesday before the market open.
