Dive Brief:
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Less than a year after taking sole leadership of On, Martin Hoffmann is stepping down as CEO, effective May 1. The company described his departure as voluntary and planned.
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Co-founders David Allemann and Caspar Coppetti take the reins from him as co-CEOs and board co-chairs. Co-founder Olivier Bernhard will stay on as an executive member of the board.
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Scott Maguire, appointed chief innovation officer in April, is being promoted to president and chief operating officer. As previously announced, Frank Sluis will be chief financial officer, a role Hoffmann held for 13 years, even after he became co-CEO five years ago.
Dive Insight:
On is presenting Hoffmann’s departure as his decision “to take a planned hiatus and pursue philanthropic interests.”
At the same time, though, the company characterized the leadership shakeup as an “updated model” that keeps the founders looped into its daily operations and strategy and “ensures On remains agile and decisive while continuing to scale."
Speaking to Retail Dive earlier this year about his first months as the only chief executive, Hoffmann said leadership was well-positioned.
“I think we have an amazing team — a very wide leadership team, which is there for many, many, years — and this team is leading the brand,” he said.
The move announced Wednesday is likely a response to business getting more complex for On, especially as Nike improves, according to Jefferies analysts led by Randal Konik. Last year, On’s annual net sales topped 3 billion Swiss francs ($3.8 billion at the time of the release) for the first time, up 30% year on year, with gross margin expanding to 62.8%, up from 60.6% the prior year.
However, the total addressable market for On “is not as big as the market thinks, so growth will slow, margins will compress, and the stock price will decline substantially,” Konik said in a Wednesday client note.
The most recent changes are just the latest in a string of leadership moves in a short period. Marc Maurer, who spent 12 years at the brand and stepped down as co-CEO in April, is leaving the company this month after a stint as an adviser.
This is “a surprising amount of shuffling of the C-suite,” Needham analysts led by Tom Nikic said Wednesday.
“Furthermore, Mr. Hoffmann was the ‘face’ of the company for investors (even when he shared the CEO role with Mr. Maurer), so this will likely come as a shock to the investor base,” Nikic said. “Investors may be disappointed that the proverbial boat is being rocked when the company is performing so well.”
