Mbappe boosts On's brand visibility, but hurdles to soccer success remain

NEW YORK, Sept 18 : On Holding made a splashy entry into soccer on Friday by signing French star Kylian Mbappe, a move that raised the Swiss running shoe brand's profile as it pushes into the sport.

But On faces difficulties in its bid to translate the high-profile partnership into a sales boost in the competitive soccer market. The brand, which is battling slowing growth in its key Americas market, is now tasked with doing what rivals have failed to accomplish: chip away at Nike, Adidas and Puma's soccer dominance. Mbappe previously partnered with Nike for roughly two decades.

On, known for its distinctive "hollow pod" soles, missed estimates last month for second-quarter net sales, alarming investors about slowing growth even as it continues to take market share from Nike and Adidas. Its shares have tumbled about 40 per cent this year.

Still, the company's price-to-earnings ratio of 18.7 values it slightly above sportswear rivals, according to LSEG data, underscoring high investor expectations for future growth. Data from M Science shows On gained market share in the three months through August, while Nike's share losses persisted.

Having expanded into tennis in partnership with star player Roger Federer, On is now looking for its next growth engine. Its push into soccer comes against a backdrop of an increasingly competitive sportswear industry, from both a product and marketing standpoint, said Mari Shor, senior equities analyst at Columbia Threadneedle.

And soccer is a tough market to crack.

"Football is one of the most expensive categories to enter and performance credibility cannot simply be bought," said Jefferies equity analyst Randy Konik, adding that the Mbappe partnership signals that On needs to "spend harder to