The Deckers-owned Hoka brand made its mark as a premium footwear option for the running community. But now, Hoka‘s lifestyle appeal is driving a new wave of growth for the brand.
In a call with analysts last week, Deckers‘ chief executive officer Dave Powers discussed Hoka’s evolution from a shoe for hard-core runners to a brand being adopted by people outside of the sport.
“There’s no doubt we are a performance innovation-driven company,” the soon-to-be retired CEO said. “But we obviously have been adopted in a pretty substantial way from a lifestyle perspective. And that’s because of the performance that’s built into the product. It’s not just that they look good, but they feel good.”
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According to Powers, this phenomenon is part of a larger trend taking place within fashion and running.
“I believe there’s a generalized trend out there that running is kind of becoming the new streetwear, Powers said. “Those looks are adopted by more consumers now than they ever have been, and we see that continuing. And we welcome those consumers into the brand, but they will be buying performance product from us, not lifestyle design products.”
Indeed, Hoka as well as its competitor, On, is increasingly gaining market share across various demographics, especially teens, as consumers opt for more comfortable shoe options in their daily lives.
“The pandemic may have fueled the more casual trend but it’s now acceptable to style your outfit with a cool running shoe like a Samba, On or a Hoka running shoe,” explained Liza Amlani, principal and founder of consulting company Retail Strategy Group. “Function over a fashion has taken over.”
Staying true to performance
According to Jane Hali & Associates analyst Jessica Ramirez, Hoka had cemented its presence in fashion even prior to the pandemic when in 2019, it launched a collaboration with fashion streetwear brand Opening Ceremony.
“They were tapping into the very early days of a chunky shoe,” Ramirez said of Hoka. “And it was the first brand within the running category that started tapping into the fashion-forward consumer.”
Hoka’s basis in fashion, Ramirez said, eventually matured during the running boom in the pandemic, reaching runners more broadly and then expanding even more to the lifestyle crowd.
But despite its popularity outside of running, Hoka isn’t necessarily leaning into more lifestyle sneaker designs, something the performance-rooted Under Armour is trying to do to increase its footwear appeal. Instead, it’s sticking to its classic performance running styles and price range while occasionally offering a new colorway or an updated upper. Powers said this strategy helps drive demand among consumers who feel that “they need the product. They need the next color. They need the next version of the Bondi, the Clifton, the Arahi and now the Mach,” he said.
As Williams Trading analyst Sam Poser explained it, Hoka isn’t trying to create a full-fledged lifestyle shoe business.
“They are keeping their core and then updating — basically changing the uppers mostly — to create [lifestyle options],” he said. “But performance is the underlying thing going on.”
As such, Hoka’s evolution into lifestyle can be understood as a result of more people adopting it outside of athletics, not because of an intentional decision to enter this category. Adidas experienced a similar effect when it launched the Ultraboost, which started its life as a performance running shoe, Poser said.
“It failed miserably [when it came out], Poser said of the Ultraboost. “Then it got picked up as fashion and all of a sudden, it’s a lifestyle shoe.”
The idea of consumers opting for performance based footwear as a lifestyle option was also previously noted by executives at On Holding as well. Last May, On’s co-CEO Marc Maurer told FN in an interview that the brand’s performance emphasis is appealing to a wide audience. “We feel we are cool because we’re rooted in performance,” Maurer said at the time.
Still, Hoka is not losing sight of the running community that defines its brand DNA.
“I can guarantee you that we will always prioritize our performance business first,” Powers said in the call to analysts. “We’ll always prioritize the specialty run accounts and we will always prioritize the hard core running and trail-running consumer.”
