June 15, 2023
Sneaker culture is a multi-billion dollar industry, with iconic brands like Nike and Adidas dominating the market. However, there’s one brand that has quietly made its way into the spotlight and captured the attention of a new generation of consumers. New Balance, the Dad Shoe, once known as the go-to shoe for “chubby white guys in their late 30s to early 40s,” has undergone a remarkable transformation. Today, it stands as a fashion-forward brand that has managed to stay true to its roots while appealing to a wider audience.
The Evolution of New Balance from Dad Shoe
New Balance has always been synonymous with reliable running shoes. The initial design of New Balance was inspired by a chicken’s three-pronged foot, observed by founder Riley, leading to the creation of a flexible arch support that provided unparalleled balance and comfort in the shoe. Its commitment to quality and comfort has made it a favorite among runners for decades. But it was also associated with a certain stereotype – the Dad Shoe. However, in recent years, New Balance has successfully shed this image and reinvented itself as a trendy brand.
The brand’s journey towards a new identity began with the rise of a passionate collector, Richie Roxas. Richie, a devoted New Balance enthusiast, started his own Instagram account, @newbalance365, to document his growing collection. His dedication to the brand and his unique sense of style attracted a following of nearly 18,000 followers. Richie’s love for New Balance extended far beyond financial gain; he collected sneakers for the sheer joy and appreciation of the brand.
While Richie may not have been interested in resale, many others were. New Balance saw a surge in sales on platforms like StockX, where it quickly became one of the top five traded sneaker brands. The brand’s collaboration with Aimé Leon Dore and the Kith Spring Collection gained significant popularity, with certain limited editions commanding high resale prices. This created a buzz around the brand and increased its desirability among sneaker enthusiasts.
The Recipe for Success
So, how did New Balance manage to transform from the “ugly dad shoe” to a fashion-forward brand? There are a few key factors that contributed to its success.
1. Trend-Right Product
The first and foremost requirement for any brand to succeed is to offer trend-right products. New Balance understood the importance of staying relevant and appealing to the evolving tastes of consumers. By introducing stylish and contemporary designs, the brand was able to capture the attention of a younger, fashion-conscious audience.
2. Careful Supply Management
New Balance employed a smart strategy of managing supply and demand. While they made their shoes available to the masses, they also created intentionally restricted and limited editions that fueled the resale market. By carefully controlling supply, they generated higher resale values and increased brand buzz.
3. Collaborations and Partnerships
New Balance recognized the power of collaborations and partnerships in building its brand. By teaming up with influential fashion brands and designers like Aimé Leon Dore and Kith, New Balance successfully elevated its image and gained credibility in the fashion world. These collaborations brought a fresh perspective to the brand and helped attract a wider audience.
4. Embracing Athletes and Celebrities
New Balance forged partnerships with renowned athletes such as Kawhi Leonard and Shohei Ohtani. These collaborations not only helped strengthen the brand’s reputation but also showcased the performance aspect of New Balance’s products. Additionally, New Balance’s presence on the feet of celebrities like IU, Hailey Bieber, Kendall Jenner, and Ryan Reynolds helped elevate its status and appeal to a broader consumer base.
5. Nostalgia and Retro Appeal
New Balance capitalized on the current nostalgia trend by leveraging its rich history and heritage. The resurgence of 90s fashion allowed New Balance to tap into retro-inspired designs and re-release classic models that resonated with consumers’ desire for vintage aesthetics. This combination of nostalgia and contemporary style proved to be a winning formula for the brand.
The Dad Shoes’ Bright Future Ahead
While New Balance’s $5.3 billion in sales for 2022 represents a significant increase from previous years, the brand still faces stiff competition from industry giants like Nike and Adidas. CEO Joe Preston is optimistic about the brand’s potential and believes that New Balance can achieve $10 billion in sales within the next few years. This ambitious goal reflects the brand’s commitment to long-term growth and sustainability. Despite its newfound success and popularity, New Balance remains true to its running heritage, never abandoning its core identity.
As Richie Roxas, the dedicated New Balance collector, puts it, “New Balance will always hold onto its roots as a running brand.” And with its growing popularity and expanding influence, New Balance is destined to leave an indelible mark on both the fashion and sneaker industries.
Although New Balance’s potential is appealing, it’s a private entity, and thus, not directly investable via the stock market. It’s feasible to own it only if you’re a large-scale private investor with billions at disposal. Alternatively, you can consider other ‘Dad Shoe’ companies, such as Asics(TSE:7936) or Saucony, under Wolverine World Wide(NYSE:WWW) , that offer public shares.
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