Hoka
The Deckers-owned Hoka brand made its name as a premium footwear choice for the running community, but now it's Hoka's lifestyle appeal that is driving a new wave of growth for the brand.
On a conference call with analysts last week, Deckers Chief Executive Officer Dave Powers described how Hoka has evolved from making shoes for avid runners to becoming a brand that's embraced by people outside of sports.
“We're definitely a performance innovation company,” the soon-to-be-retired CEO said, “but from a lifestyle standpoint, we've got pretty serious adoption, and that's because of the performance we build into our products. Not only do they look good, they feel good.”
Powers says the phenomenon is part of a larger trend happening in the worlds of fashion and running.
“I think there's a general trend that running is becoming the new streetwear,” Powers said. “Running style is being embraced by more consumers than ever before, and I see this trend continuing. We welcome those consumers into the brand, but they're buying from us as performance products, not lifestyle design products.”
In fact, as consumers choose more comfortable shoes for their daily lives, Hoka and its competitor On are seeing their market share grow among different age groups, especially teenagers.
“The pandemic may have led to more casual trends, but it's now acceptable to coordinate your outfit with cool running shoes like Samba, On or Hoka,” said Riza Amrani, president and founder of the consulting firm Retail Strategy Group. “Function has taken over fashion.”
Stay true to your performance
Hoka had been building a strong presence in the fashion industry even before the pandemic, starting a collaboration with fashion streetwear brand Opening Ceremony in 2019, according to Jessica Ramirez, an analyst at Jane Harri & Associates.
“They capitalized on the early days of chunky shoes,” Ramirez said of Hoka, “and were the first brand in the running category to start capturing the fashion-conscious consumer.”
Ramirez said Hoka's foothold in fashion matured during the running boom during the pandemic, reaching a wider range of runners and then expanding more to lifestyle-oriented people.
But despite its popularity outside of running, Hoka isn't necessarily leaning into designing lifestyle sneakers, something that performance-rooted Under Armour is trying to do to boost its footwear's appeal. Instead, the company is sticking to classic performance-running styles and price points, occasionally offering new colors or updated uppers. Powers said the strategy has helped drive demand from consumers who feel “we need the product. We need the next colorway. We need the next version of the Bondi, the Clifton, the Arahi, and now the Mach.”
As Williams Trading analyst Sam Poser explained, Hoka isn't trying to create a full-fledged lifestyle-shoe business.
“They kept the core and updated it, basically changing the upper, [lifestyle options]”But performance is what it's all about,” he said.
So Hoka's evolution into a lifestyle makes sense not as a deliberate move into the category, but as a result of more people adopting it outside of sports. Pozer said Adidas experienced a similar effect when it launched UltraBoost, which began life as a performance running shoe.
“Failed miserably [when it came out]”Then it started to become fashionable and all of a sudden it became a lifestyle shoe,” Pozer said of the UltraBoost.
The idea that consumers are choosing performance-focused shoes as a lifestyle choice has been something that On Holdings executives have been talking about for some time. In an interview with FN last May, On co-CEO Marc Maurer said the brand's performance focus appeals to a wide range of people. “We feel that it's cool because we're rooted in performance,” Maurer said at the time.
Still, Hoka hasn't lost sight of the running community that defines its brand DNA.
“We are committed to always putting our performance business first,” Powers said on a conference call with analysts. “We will always prioritize our specialty running customers, and we will always prioritize our hardcore running and trail running consumers.”