UPDATE: Sept. 7, 2021: On has set the number of shares for its IPO at 31,100,000, including 25,442,391 from On itself and 5,657,609 from "certain selling shareholders," the company said in a release. The share price is expected to be between $18 and $20, and underwriters will have the option to purchase up to an additional 4,665,000 shares.

Dive Brief:

• Running brand On has filed for an IPO with the Securities and Exchange Commission, the company said Monday. The number of shares offered and the price range have yet to be determined.

• The brand, which sells direct-to-consumer through its website and a limited number of stores, as well as wholesale, has applied to list its stock as "ONON" on the New York Stock Exchange, according to a company press release. On has the backing of tennis star Roger Federer, who became an "active co-entrepreneur" and investor in 2019.

• According to its prospectus, On has grown net sales at a compound annual growth rate of 85% from its founding in 2010 through 2020, which it claims makes the brand "one of the fastest-growing scaled athletic sports companies in the world." In 2020, the brand recorded net sales of 425.3 million Swiss Francs ($465.4 million).

Dive Insight:

Performance brand On is taking advantage of a hot IPO market to make its public debut. This year alone, retail has seen IPO filings from Rent the Runway, Authentic Brands, Torrid, Honest Co., ThredUp and Joann.

Several of the above are e-commerce startups, and DTC darling Warby Parker also joined the list after filing for a direct listing this week. (Fellow DTC brand Allbirds is rumored to be close to an IPO as well.) 

On is still a majority wholesale business, but the company generated 37.7% of its net sales through DTC channels last year, and noted in its prospectus that DTC sales have "increased significantly" since its inception. At the moment, On's DTC channel includes its website, a New York City flagship store and four small-format stores in China.

The company's growth plans, as outlined in the prospectus, include expanding its DTC channels by enhancing its digital experience and building out "a very selective presence with flagship locations in key cities around the globe," as well as continuing to grow wholesale. New product categories are on the horizon as well, including moving from selling just footwear to apparel and accessories.

IPOs have been a mixed bag for retailers, especially digital natives like Casper, which faced a disappointing IPO last year that also revealed its lack of profitability (On, likewise, has recorded net losses for 2020 and 2019, though it made a profit in 2018 and so far in 2021 is in the black). This year, Torrid reached the high-end of its projected range, raising $231 million at a $2.3 billion valuation, while Honest Co. got close as well, raising $413 million at a $1.5 billion valuation. For Honest Co., though, the path after going public has not been steady.

On has the benefit of operating in the athletics space, which continues to be a popular category as the pandemic boosted athleisure even further, leading to consumers wearing athletic clothing for much of their everyday tasks. On has experienced the same shift, noting that "a broader set of consumers [have adopted] On's products in their everyday lives," not just for performance. The company is leaning into that by "creating performance products for an active lifestyle and exploration of nature and trails."

Goldman Sachs, Morgan Stanley and J.P. Morgan are joint lead book-running managers for the proposed IPO, while Allen & Company, UBS Investment Bank and Credit Suisse are joint book-running managers.