On March 12, 2024 local time, Jim Weber, CEO of Brooks, a US running shoe brand, announced his resignation after 23 years of service.
"Serving as the CEO of Brooks over the past 23 years is an honor. Brooks has laid a solid foundation during this period, and I believe Brooks will continue to grow in 2024 and beyond," Jim Weber said in a statement.
Although Jim Weber expressed confidence in the continued growth of the brand when he resigned, Brooks' recent financial report data still has some hidden concerns. Brooks' financial report data shows that the company's global revenue in 2023 was $1.2 billion, an increase of only 5% compared to 2022. As a running shoe brand still in the early stages of growth, a single digit growth of 5% is slightly slow.
Swiss running shoe brand On's sales in the 2023 fiscal year increased by 46.6% year-on-year to 1.792 billion Swiss francs (approximately 14.655 billion yuan); The French running shoe brand Hoka One One achieved a revenue of 1.41 billion US dollars (approximately 10.141 billion yuan) in the 2023 fiscal year, with a year-on-year growth rate of 58.5%. The revenue for the 2024 fiscal year is expected to exceed 2 billion US dollars.
Although several running shoe brands entered a period of rapid growth around 2020, based on their current performance, Brooks has already fallen behind its competitors in terms of both volume and growth rate.
The reason for Brooks' sluggish growth may be due to its slightly conservative strategy in global market development.
Financial data shows that out of Brooks' $1.2 billion revenue in 2023, $1 billion came from the North American market, while less than $200 million came from other global markets. Brooks has not yet opened an offline physical store in the Chinese market, which is a battleground in the running shoe industry. Currently, its official online flagship store on Tmall has only 120000 followers.
On the other hand, Angpao achieved a high growth of 75.9% in the Asia Pacific region of the Chinese market in the fiscal year 2023, with a revenue of 141 million Swiss francs; HOKA has achieved double-digit growth in the international market in the past two fiscal years, and in 2023, it signed the brand's first celebrity spokesperson - Chinese actor Li Xian, hoping to further enhance the brand's visibility in the Chinese market.
In fact, there is not much difference in product strength among the three brands of running shoes. First, let's look at the pricing. The official tag prices of the flagship running shoes of the three brands are all around 1299 yuan, all positioned as mid to high end.
In terms of technology, Brooks excels in cushioning technology and has five types of midsole technologies, including BioMoGo DNA adaptive cushioning midsole and Super DNA cushioning midsole. Such technological reserves have the ability to compete with competitors. In terms of product matrix, Brooks also has a comprehensive running shoe matrix for various types such as outdoor off-road, jogging, and daily leisure, and does not have a significant gap with many peers.
The delay in breaking through in the Chinese market and the sluggish growth in the global market may be due to Brooks' failure to cultivate so-called "explosive products".
The two giants Nike and Adidas have successively launched flagship technologies such as Zoom and Boost, occupying the largest two shares in the running shoe market; An example of breaking the circle through popular products is HOKA: the first wave of French brand awareness in the Chinese market came from the popular item Tor Ultra Low. The price of this shoe once soared to 4000-5000 yuan in the secondary market, while the high top version still costs over 3000 yuan to this day.
After Jim Weber's departure, Brooks' next CEO has been confirmed to be another veteran who has served Brooks for over 20 years - the current CEO and COO of the company, Dan Sheridan.
It is worth mentioning that after Jim Weber leaves, Brooks will face a round of executive restructuring internally. Positions including Chief Executive Officer, Chief Operating Officer, etc. will welcome newcomers.
In terms of regional markets, Brooks announced that the appointment of a new general manager for the Europe, Middle East, and Africa (EMEA) region will be announced in the coming months. However, there have been no reports of executive adjustments in the Asia Pacific region where the Chinese market is located. This may mean that in the coming years, American running shoe brands will not make significant adjustments to their strategies in the Chinese market.