On Running Bets on Kylian Mbappé to Crack the Football Market
TREE NEWS reports: Swiss sportswear brand On Holding AG has signed French superstar Kylian Mbappé as a global brand ambassador, marking its most aggressive move yet into football — a category long dominated by Nike, Adidas and Puma. Mbappé will directly participate in the development and testing of future football boots and apparel, the company said. On plans to launch its first football boot in 2027, applying its LightSpray racing technology to the pitch. French football legend Thierry Henry has been named On’s Head of Football, while Swiss women’s national team player Sydney Schertenleib will also contribute to product testing.
Why This Matters for Investors
The announcement is strategically significant because On is attempting to replicate the playbook that worked with Roger Federer in tennis: using a marquee athlete to break out of its niche running identity and into a global, higher-margin sport. Football, however, is a far tougher arena. Unlike tennis, football is a mature commercial ecosystem built around clubs, leagues, national teams and tournaments, with entrenched sponsorship networks controlled by Nike and Adidas. On is essentially pre-building brand awareness for a product category that does not yet exist on its shelves.
Growth Deceleration Raises the Stakes
The expansion comes as On’s growth profile is shifting. Full-year 2025 net sales crossed CHF 3 billion for the first time, reaching CHF 3.014 billion, up 30% year-over-year. Footwear still generated CHF 2.804 billion, the vast majority of revenue, but apparel and accessories grew 68.2% and 124.1% respectively — far outpacing footwear’s 27.5% gain. In the second quarter of 2026, that divergence persisted: apparel rose 47.7% and accessories 88.3%, while footwear grew just 10.9%. Total net sales grew 13.5% year-over-year, a sharp slowdown from 2025’s 30%, or 21.6% at constant currency.
Management has said it is deliberately restraining wholesale channel orders in promotional-heavy markets to protect full-price selling and its premium positioning. That is a defensible long-term strategy, but it puts pressure on the company to prove it can grow outside its core running franchise.
Market Implications
- On Holding (ONON): The football entry is a multi-year optionality play rather than a near-term earnings driver. Investors should watch whether the brand can sustain premium pricing while absorbing elevated marketing and R&D costs. The stock is likely to trade on execution risk around decelerating footwear growth.
- Nike (NKE) and Adidas (ADS.DE): Losing Mbappé’s association to an upstart is a symbolic blow, though neither company faces immediate revenue loss. The bigger risk is gradual share erosion in the high-margin football boot and apparel segment if On gains traction with younger players.
- Puma (PUM.DE): As the third incumbent in football, Puma is most exposed to a new entrant competing for the same athlete and club sponsorship pool.
- Broader consumer discretionary: The move reflects continued premiumization in athletic wear, a theme that has supported higher multiples for brands with strong pricing power.
Key Takeaways for Investors
- On is trading near-term growth deceleration for long-term category expansion — a classic reinvestment story that demands patience.
- Football is a capital- and relationship-intensive market; success will depend on club and league deals, not just one star athlete.
- Watch the 2027 boot launch and any club sponsorship announcements as the first real validation points.
- Incumbent brands remain dominant, but On’s premium positioning and technology narrative give it a credible differentiation angle.
