- Brooks had annual revenue of $62 million when Jim Weber became CEO in 2001.
- The brand recently hit $1 billion. Weber believes the company can quadruple that by 2030.
- Weber’s plan: keep it simple and focus on shoes for runners.
Brooks CEO Jim Weber expects the running shoe market to double over the next decade. He also expects Brooks, which currently has 15 million customers, to continue to gain market share.
Weber believes that by 2030, Brooks will have 60 million customers and $4 billion in annual sales, a figure comparable to Nike’s wholesale business in its last fiscal year.
“That’s the opportunity we see for Brooks,” Weber said in an interview with Insider.
Brooks is one of the few running brands to gain momentum while Nike’s running business remains essentially flat. In addition to Brooks, Hoka and On have also seen strong sales growth recently. Hoka’s sales soared 62% in 2021 to $571 million. Sales increased by 68% in the first quarter.
Brooks has doubled his business since 2017, according to Weber’s new book, “Running With Purpose.” Revenue soared 31% last year to $1.13 billion, Weber told Insider. It would have been higher had the company not had the “excitement” of the industry-wide supply chain, Weber said with a chuckle. He expects sales to reach $1.3 billion in 2022.
Industry leader Nike’s wholesale running business soared 4% in the company’s last fiscal year, but has fallen 11% in the past two years and nearly 14% since 2014. Nike only distributes wholesale revenue for its running brand.
“We have this situation now where running is definitely having its day in the sun,” said Wedbush Securities analyst Tom Nikic. “A lot of runners are looking for novelty and new innovation and that’s why they have turned to brands like Hoka and On.”
Nikic warned that the growth of Brooks, Hoka and On is not a blow to Nike.
“Last year, Nike’s running business, although down from the peak, was about $4 billion in wholesale equivalent. At retail, you’re talking about a company running that’s $8 billion. That’s multiples of what Hoka or On did. Even Brooks. Nike is still the market leader. But I think you’re seeing runners who want to find something something new, something a bit innovative, something they’ve never seen before.”
Weber thinks Brooks can hit $4 billion without artistic collaborations, hype drops and other forms of popular buzz-making that Nike is known for. He plans to stick to the basic business plan of making quality running shoes and selling them where runners buy, including specialty running stores.
The same strategy has been in place since Weber became CEO in 2001. At the time, Brooks was generating $62 million in annual sales.
In the first quarter of 2022, Brooks ranked #1 in the U.S. adult performance running shoe market, according to NPD Group, with a 22% market share. (NPD data does not track direct-to-consumer sales.) Brooks’ Ghost and Adrenaline products were the top-selling lines. Weber thinks the performance will continue.
“We’re on a quest to be the #1 brand with runners,” he said.
Calling his own shots
The pandemic has forced CEOs to make various quick decisions. Against the advice of his CEO peers, Weber decided against layoffs despite fears of an economic downturn. He also decided to increase stocks.
As the pandemic forced gyms to close in March 2020 and more people started running for exercise, sales began to pick up.
“We got our supply chain back up and running, I think, much faster than anyone else,” he said. “And we haven’t had a single layoff.”
While gyms have since reopened, Weber believes people who started running during the pandemic will continue with the habit, similar to what Brooks saw after the 2008
when new customers have shown loyalty.
“We think we’re in a secular trend,” he said. “There’s a bit more health and wellness awareness.”
And at a time when industry giants are focusing on direct sales and building corporate stores, Weber, true to form, is pushing Brooks in the other direction.
Running is a global activity and popular in big cities and small towns alike. While Brooks sells direct to consumers, Weber believes the best way to reach runners is through local communities.
“You can’t build enough stores to have a presence in all the places people run to,” he said. “Even the best retail brands in our industry don’t have stores in every community, from Des Moines to Spokane.”
Wedbush’s Nikic thinks it’s a good plan.
“Wholesale, if done right, can be very powerful,” Nikic said. “They know the market and understand the customers who shop at these stores.”