The highly popular New Balance has replaced Nike and adidas as an important growth driver for third-party shoe retailers. As the market share of Nike and adidas continues to be squeezed, the century-old sports brand New Balance has achieved a counterattack.
According to Fashion Business News, New Balance CEO Joe Preston recently announced 2023 financial report data in an interview with Bloomberg. Last year, brand sales surged 23% year-on-year to approximately US$6.5 billion, a record high, and the growth rate was higher than the previous year. 21% further increased, almost doubling the US$3.3 billion in 2020, and clothing sales also exceeded the US$1 billion mark for the first time.
In terms of its core footwear business, New Balance performed strongly, ranking second only to Nike and Adidas in the field of functional shoes, and fifth in the overall sports industry, behind Jordan Brand and Skechers.
During the reporting period, New Balance achieved double-digit growth in all regions of the world. Europe and the United States surged by more than 35% and 20% respectively. As much as 63% of sales on the brand’s official website came from new consumers last year. New Balance currently operates more than 500 stores around the world, and has more than 3,000 retail partners and 350 promotion ambassadors.
The highly popular New Balance also replaced Nike and Adidas last year as an important growth engine for third-party shoe retailers.
Foot Locker CEO Mary Dillon said in a conference call with analysts in November that New Balance’s third-quarter sales grew well above 100% a year ago, with sales of men’s, women’s and children’s clothing performing well. Nordstrom Chief Brand Officer Pete Nordstrom also bluntly stated that New Balance is one of the key brands driving positive growth in footwear sales this quarter.
Joe Preston emphasized that New Balance’s strong performance was mainly due to the effectiveness of a series of strategic initiatives. He revealed that New Balance’s investment in digitalization, brand activities and manufacturing last year hit a new record.
Industry insiders bluntly stated that after successively delivering results that surpassed the industry average, New Balance has successfully taken off the “elite” label that Steve Jobs affixed to it back then, and is taking a younger stance amid the cyclical trend of retro running shoes. Return to the public eye.
This stems from the fact that New Balance, as a non-listed company, has the freedom not to compromise easily with the market. It does not need to consider the reaction of the capital market too much when making decisions, giving the brand enough space and courage to innovate.
New Balance was founded in Boston, the marathon city of the United States, in 1906. It initially produced arch supports, and later gradually became a sports goods manufacturer focusing on running shoes. Together with Asics, Brooks, and Saucony, it is also known as the world’s four largest jogging shoes. .
In 1989, New Balance entered the Chinese market for the first time. The business was not directly operated, but handed over to the exclusive agent Yangjiang Youlian Shoe Company. In the 1990s, with the upsurge of China’s market economy, New Balance made smooth progress in the domestic market.
However, New Balance’s complete popularity began in 2012. Under the spontaneous “endorsement” of Steve Jobs, lifestyle and leisure retro products such as M990GR2, M991GL and M992GR quickly entered the attention of the elite. New Balance’s basic 574 three-primary color series also became Hot item.
Led by Aimé Leon Dore, New Balance has ushered in a period of explosive collaboration. In just six months, it has launched 25 joint projects. In addition to Japanese brands such as eYe JUNYA WATANABE MAN, COMME des GARÇONS, and BEAMS, there are also Salehe Bembury, Joe Freshgoods, AURALEE and other niche designers and brands.
There are also surprises in the collaboration between New Balance and popular brands. After the New Balance 574 collaboration on the Miu Miu 2022 spring and summer show became the center of discussion together with the Miu Miu navel-baring suit, the latest joint shoes between the two parties once again triggered consumers to snap up. The sneakers priced at more than 9,000 yuan were sold on the day they were released. Sold out quickly.
By selecting partners in a targeted manner, New Balance can systematically re-enact and renovate the brand’s classic shoe styles from the 1970s and 1990s, while also responding to changing trends in different eras. This has virtually made New Balance a permanent player in consumers’ shoe cabinets. Whether it is the Gray and Maillard trends that emerged last year, or the retro wave, the brand can be seen, and its appearance rate is comparable to that of Nike and adidas. .
Other analysts pointed out that by deliberately keeping a certain distance from popular trends when creating products, New Balance was able to stand out in the over-hyped sneaker market and win the favor of many deep fashion enthusiasts.
However, as a professional sports brand, fashion is at most just an “appetizer” to attract consumers’ attention. New Balance has realized through multiple cyclical fluctuations that professionalism and continuous innovation are the keys to continued growth in brand power.
In order to further enhance the brand’s influence in the professional sports field, after returning to the basketball market in 2020 and signing Toronto Raptors star Kawhi Leonard and NBA Bulls basketball star Zach LaVine, New Balance signed its first female basketball player in August last year Cameron Brink.
Cameron Brink was named the WBCA Division I Defensive Player of the Year, won the 2023 Vienna FIBA 3×3 World Cup, and was selected to the All-American team for 4 consecutive years.
Tennis player Coco Gauff, sponsored by New Balance, also won her first Grand Slam title at the US Open. The brand’s collaborations with athletes such as Kauhi Lenoard and Shohei Phtani also drive brand popularity, especially among younger consumers.
In terms of product innovation, New Balance has reached a cross-border cooperation with American coffee roaster Blue Bottle Coffee to launch environmentally friendly concept running shoes based on Fresh Foam X 1080v12 shoes. The shoes are made of solution-dyed and undyed materials, saving 80% of water consumption compared to traditional dyeing methods.
At the end of last year, New Balance also entered the perfume business for the first time, launching the Distilled series of limited edition perfumes. There are two fragrances in this series, namely Original and Court, inspired by the brand’s classic 990 shoes and OG basketball shoes.
As market demand continues to grow, New Balance is increasing productivity. In the past year, it has expanded its Skowhegan Maine factory, opened a new US factory in Londonderry, New Hampshire, and opened a new distribution center near Nashville, Tennessee.
To better serve consumers, New Balance will open 90 new stores this year and upgrade 50 existing stores. The brand also recently launched its first resale platform, New Balance Reconsidered, to sell products that are returned by consumers, are imperfect in appearance, and cannot be sold as new shoes.
According to the plan, New Balance will continue to further develop other sports categories such as basketball and football based on the classic running product line. At the same time, it will continue to improve digital technology and productivity, use data analysis to keep up with consumer trends, and focus on product innovation.
Although New Balance has not disclosed specific revenue data in the Chinese market, the brand is actively expanding its influence in China, including signing Chinese athletes and upgrading brand concept stores.
In view of the strong performance of the brand, Joe Preston said that New Balance currently has no plans to go public and will continue to maintain the values and operating model of the family business. The long-term goal is to make New Balance’s annual revenue reach 10 billion US dollars.
