Yahoo Finance Running industry isn't vulnerable to recession, Brooks and New Balance CEOs say
As economists and businesses weigh the probability of a shallow, mild, or even severe recession in 2023, CEOs from two household-name running companies remain optimistic about their prospects to weather any kind of downturn.
“I think running has a good shot of muddling through this economy with all of the ups and downs we see,” Brooks Running CEO Jim Weber told Yahoo Finance Live (video above). “Over the last 30 years, it's been more or less recession resistant. We saw it in the dot-com bust two decades ago, or the Great Recession. Even in COVID, when retail shut down, people were out there running, and our category grew.”
New Balance CEO Joe Preston echoed Weber's sentiment, noting that for some people, setting an exercise routine is as simple as lacing up sneakers for a run.
“It's a very inexpensive way to begin any sort of fitness regimen, if you will,” Preston told Yahoo Finance Live. “Right now, we're seeing the consumer hold up, particularly the consumers shopping for our brand, and we'll see how that plays out the rest of the year.”
Running shoes 'so much better' than 5 years ago
According to Brooks's Weber, there's another factor keeping the running shoe category vibrant: the latest materials that soften impact, weigh less, and may even help athletes to unlock new personal records.
That innovation in footwear — particularly in new foam compounds — has offered additional value for customers.
“Materials have really revolutionized footwear,” Weber said. “The product today, I believe, is so much better than just five years ago, and materials and putting them together in unique ways is a part of that.”
“For example, our Glycerin 20 has a critical foam in it, and we're going to take that technology across our line — it's also in our Catamount shoe and our Hyperion Max,” the Brooks CEO continued. “It's just better. It's lighter weight. It has the best cushion characteristics and durability metrics that we've ever seen in a material.”
New Balance has also capitalized on foam soles in running shoes, and Preston said the athletic footwear company plans to expand the sole to other sports categories as well.
“We have a technology called Fresh Foam that we originally developed for our running product,” the New Balance CEO said. “We've been bringing that along into some of our other categories. That for us is a core innovation platform we believe can help athletes in various sports.”
Other sneaker companies, including major players such as Nike (NKE) and Adidas (ADDYY), have also deployed cash and human capital to research and develop more responsive midsoles — along with some creative names to match.
Along with Brooks's “DNA Loft” technology and New Balance's “Fresh Foam,” Nike developed a “ZoomX” foam midsole, Adidas has its “Boost” soles, and HOKA trademarked its cushioning “Profly” and J-Frame foam technology.
While a lot of the new designs have centered on foam soles, the “upper” portion of the shoe is next on New Balance's list.
“A lot of the innovation, from a footwear standpoint, over the years, has been centered mostly around the midsole, trying to find compounds that are lighter, more responsive, more cushioned, and things like that, and that will continue,” Preston said. “In the future, I see the technology shifting more to the upper, in making things that are more environmentally safe, in trying to reduce waste, and our product teams are really focused on that.”
Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter @thebradsmith.
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