New Balance Sneakers Changed Company's Direction
Sneakers and sportswear are a huge business, as they gain advantage from the popularity of professional sports league. Following a very tight competition among brands, New Balance has to make a change in company's direction. In order to deal with the new brands that suddenly became strong competitors.
Dominated by big brands like Adidas and Nike, sneakers and sportswear industry created big business by an endorsement from major favorite sports. Endorsement from top athletes is the most pursued target in sportswear business. For such deal will result in a huge boost in sales of product worn by the athlete. Along with efficiency strategy by relocating factory to a region with cheaper labor.
New Balance, a company founded in 1906 in Boston is only a handful of brands that still keep their factory in U.S. and U.K. The cost of manufacturing has made the price of a pair of New Balance sneakers is relatively more expensive than other brands. Moreover, New Balance has not spent a huge amount of money to contract top athletes. Their recent high profile sponsorship was with Liverpool club in English Premier League starting 2015 season. Meanwhile, new competitors have come and make surprising result with an unexpected move.
One of the competitors is the fastest growing brand Under Armour. As reported by Market Realist, Under Armour made a huge impact by getting an endorsement contract from Stephen Curry, an NBA Most Valuable Player. Its sneaker sales is expected to achieve $1.7 billion revenue in 2018. Most of their revenue are achieved by sales of Curry One basketball sneakers, following the success of Stephen Curry and the Golden States Warrior winning 2015 NBA championship.
Skechers, another brand, made a sudden rise challenging New Balance. As CNN Money reported, Skechers is listed as the hottest brand on Wall Street in sneakers market. Skechers has its stock up to 150% in 2015. It made a jump with a different style of the endorsement deal. While Nike and Adidas are known to pursue endorsement from popular athletes like Kobe Bryant, Maria Sharapova, Tiger Woods, and Derrick Rose, Skechers made a different approach. They used singers Demi Lovato and Meghan Trainor to endorse their brand and the strategy is working very well.
New Balance, still a private company, must make their move to anticipate a sudden competition from those two brands. Teaming up with Burton, snowboarding company, New Balance develops a line of snowboarding boots and outdoor shoes, as reported by Business Insider. This new snowboarding boots is called Burton Imperial x New Balance and both of them will benefit from "street to snow" style shoe partnership. The report also mentioned this new line will be available at selected Burton store since October 24 and November 1 for the global market. Although it is still too early to see the result from this new company direction, as a company who has stood for more than 100 years in sneakers business, New Balance is still a very strong brand.