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Asics CEO: Some sneaker brands are following a ‘recipe for death’

Daniel Roberts
Senior Writer

The New York City marathon is on Sunday, and for 25 years, Asics has been the official footwear and apparel sponsor of the event. But this, its 25th year as sponsor, will be its last.

Asics Americas CEO Gene McCarthy says the sponsorship has been a “tremendous relationship” and that both Asics and the New York Road Runners, as brands, have “grown up” together in that time. But it was time for a change. “There’s a greater good here, or greater god maybe, which is running, and participation,” he says. “We always want to make sure we are fanning the flames for keeping people in the sport, to enjoy running, not just for marathons but everyday fitness.”

In other words: sponsoring the marathon may not have as much value as it once did. (Asics also sponsors a number of track-and-field athletes like Lolo Jones and Candace Hill, and tennis players like Gael Monfils.) Asics wants to branch out and reach new customers; anyone running in or watching the marathon surely already knows Asics.

Indeed, the Japanese-owned company, which trades on the Tokyo Stock Exchange and has a $4 billion market cap, is clearly trying some new things. This year it spent $85 million to acquire Boston-based fitness tracker Runkeeper, and will open a new “global digital hub” in Boston with Runkeeper as its core. This follows an obvious trend: last year, Adidas bought fitness tracker Runtastic for a reported $240 million and Under Armour acquired fitness tracker MyFitnessPal for a reported $475 million. Nike, meanwhile, built its own app and partnered with Apple on a Nike+ Apple Watch Series 2.

“We’re not trying to keep up with the Joneses,” McCarthy cautions. “It’s more a matter of the way of the world now… it’s beyond just wearables, it’s also the analytics. That’s the huge benefit. Wearables, that is very, very fast moving. If you wait for the greatest technology, you’ll never buy anything. Are we in that game? Yes. But in years to come… I think it will be individual technology for each person, and then footwear and apparel becomes the accessory.”

Asics Americas, which in 2014 surpassed $1 billion in annual sales, doesn’t want to just follow existing trends (even if that’s what buying a fitness tracker this year may look like), and doesn’t try to predict the next trend. McCarthy says that’s what some sneaker brands have been doing: attempting to shape what consumers want rather than letting them decide. “I have this old saying that you don’t own the brand, the consumers do—you just manage it for them,” he says.

The point applies to the current athletic footwear and apparel market, in which the trend toward more fashionable, comfortable workout gear (“athleisure”) has stayed strong, and in which many people are wearing performance sneakers as everyday shoes. This blending of performance and lifestyle is “driven by the consumer,” McCarthy says, and when brands try to steer it, “I believe it’s a recipe for death.” He has seen many do it: McCarthy worked at Nike, Jordan Brand, Reebok, Timberland, Under Armour and Merrell before joining Asics one year ago.

So how does Asics play it? By marketing its existing Tiger line of lifestyle sneakers (Asics was born out of the 1977 merger of Onitsuka Tiger with GTO and JELENK) to “a generation of consumers that have never seen it before, so what’s old is new,” McCarthy says. That is: tout your classic shoes rather than creating new shoes designed to please people who want both performance and fashion.

It’s a somewhat contrarian outlook, since Adidas has had great success this year with its Flux (launched in 2014) and NMD (2015) lines—both are performance sneakers designed to also be wearable as casual street sneakers. Adidas has also refreshed “Originals” like the Superstar and Stan Smith, which is more in keeping with McCarthy’s recipe of sticking to existing classics.

What’s clear from looking at the shifting US footwear industry this year, where Adidas has stolen share from Nike and, in the last few years, Skechers has made exponential gains, is that, as McCarthy says, “The footwear industry has changed dramatically… This blur of what an athletic shoe should be is causing consternation in the marketplace. Anybody who’s going to try to predict what the next trends are going to be, that’s a tough chore.”

Instead, his formula for Asics is to “stay the course, be true to who you are… And let the consumers decide.” Then again, letting its sponsorship of the New York City Marathon end is something new, not its usual course—Asics might miss the marathon deal once it’s over.

Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite.

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