Yahoo Finance New Balance CEO on brand momentum: 'We're attracting a younger consumer'
What’s old is new again as the retro sneaker trend continues to be a wind in the sails of shoe manufacturers, and New Balance is capitalizing on the opportunity to bring in the next generation of consumers.
The athletic footwear and apparel company is seeing searches for its brand surge this year, resulting in record third-quarter growth and momentum heading into the holiday season, according to CEO Joe Preston.
“We're attracting a younger consumer," Preston told Yahoo Finance Live (video above) about the demand. "Those younger consumers are coming into our brand. And they're really coming across our categories."
Retro and athletic styles, in particular, are categories that have been outperforming, the CEO noted.
New Balance's 990 shoe, released 40 years ago, remains among the brand's most searched-for items on its website. And competitor Nike is seeing similar retro-release success. Its Air Force 1 shoe was the top sneaker on resale marketplace StockX in 2021, four decades after that shoe was released.
Supplementing its running and lifestyle sneaker selection, New Balance is pushing further into performance athletic shoes by landing partnership deals with the likes of five-time NBA All-Star Kawhi Leonard, Tennis phenom Coco Gauff, and U.S. Olympic gold medalist Sydney McLaughlin.
“Our entry back into basketball with the signing of Kawhi Leonard...three or four years ago has given us great energy in that category," Preston said. "And that's transcending across multiple categories as well.”
New Balance finding 'a hedge against promotions'
Preston noted that the brand kicked off the holiday shopping season with robust sales across all of its channels. Amazon (AMZN), meanwhile, highlighted New Balance apparel and sneakers as among the e-commerce giant's best-selling items over Thanksgiving weekend.
"Black Friday and over the weekend, we had really strong volume on our website, newbalance.com, as well as through our own stores and our partner stores," the CEO said. "So we feel really confident that we're going to continue to have that momentum."
At the same time, sneaker manufacturers continue to report excess inventory pains that are leading to pricing dilemmas.
"We have tried to pass along some of the costs that we've been absorbing, whether through labor or through logistics and other elements of that," Preston said. "And so as we come into the holiday season, there's also inventory in the marketplace — that we have inventory and our retailers have inventory — and we're trying to be selective about where we're promoting."
While retailers such as Foot Locker (FL), Macy's (M), and Dick's Sporting Goods (DKS) have already started discounting merchandise this holiday season to move through inventory, some brands have been attempting to leverage direct-to-consumer channels and data from online engagements to better manage inventory.
"I think DTC is a hedge against promotions," Bernstein Analyst Aneesha Sherman told Yahoo Finance Live. “If you don't have a lot of product that's sitting with wholesale partners, you're not going to see a ton of product marked down in the market because you have control over your inventory."
For its part, New Balance isn't pulling inventory back from its retail partners, though Preston emphasized that "being direct-to-consumer through our stores and online is allowing us to get closer to the consumer."
"That is absolutely imperative on our behalf," he added. "We think it's a big reason for our brand momentum, and we think it makes us a better partner for our wholesale partners."
Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter @thebradsmith.
Click here for the latest trending stock tickers of the Yahoo Finance platform.
Read the latest financial and business news from Yahoo Finance.
Download the Yahoo Finance app for Apple or Android.
Follow Yahoo Finance on Twitter, Facebook, Instagram, LinkedIn, and YouTube.
