Initial public offering of a shoemaker Sign of growing demand for sports products
Investors rushed this week to buy shares of running shoe company On when it debuted on the stock exchange, amid new signs that consumer spending remains resilient.
Why is this important: Clothing sales rebounded earlier this year as the economy reopened – and buying sportswear, especially sneakers, is a pandemic habit that is not going out.
- Shares of Swiss company On began trading nearly 50% above the IPO price, bringing the company’s value to over $ 6 billion.
Go back: Brooks, Puma and Hoka were among the top performing running shoe brands in the early months of the pandemic last year, according to the NPD Group.
What they say : There has been “growing demand” for athletic products, running shoes and sneakers because people are now returning outside their homes, says Brian Nagel, CEO of Oppenheimer.
- It is a continuation of the ongoing boom trend that began with the onset of the pandemic, he adds.
The big picture: As consumers now have the disposable income to spend more, they may be more willing to pay for “even more fashionable, sustainable and performance-oriented” products, Nagel explains.
- One, in particular, has been ranked among the hottest running brands in retail, Mitch Kummetz, senior footwear and apparel analyst at Pivotal Research, told Axios.
Watch to watch: Allbirds should then start trading on the Nasdaq.