On and Mbappé: The Operation Behind the Deal

Kylian Mbappé has left Nike, a relationship that reportedly ran back to his youth career, and joined a Swiss running shoe company that did not exist when he was born.

That company is On. And the interesting part of the announcement is not the sponsorship. It is the business On had to build first to make a move into football possible, and the operation it now has to build to make it work.

The business underneath

On was founded in Zurich in 2010 by Olivier Bernhard, David Allemann and Caspar Coppetti with one idea: a running shoe that felt different. Sixteen years on, the FY2025 filings describe something much larger.

Source: On Holding AG Form 20-F for FY2025; On full-year 2025 results release, 3 March 2026.

Three things in that table matter for what comes next.

The first is scale. Net sales passed CHF 3bn for the first time, cash on the balance sheet passed CHF 1bn, and the business is now growing fastest outside its original markets: Asia-Pacific sales nearly doubled, up 96% to CHF 511m, while the Americas grew 18% (On FY2025 20-F). Global brand awareness is "approaching 30%" by the company's own measure. That is a brand with the reach to enter a new sport.

The second is margin. Gross margin rose to 62.8%, and by the second quarter of 2026 it had reached 65.4%, with full-year guidance raised to at least 65% (On Q2 2026 results). Those are premium numbers for a footwear business, and they are the financial room that funds a multi-year category launch with no revenue attached to it yet.

The third is the one most coverage skipped. Net income fell 15.9% in a year when sales grew 30%, driven mainly by foreign exchange on a Swiss-franc-reporting business selling in dollars (On FY2025 results). Fast growth and a strong operating business do not automatically mean a rising bottom line. Worth remembering when the football numbers start arriving.

How On sells

The channel mix is where On's operating discipline shows most clearly, and it is directly relevant to football.

Direct-to-consumer grew 33.7% in FY2025 to 41.8% of sales, and by Q2 2026 it was 45.7% (On FY2025 20-F; Q2 2026 results). On's stated ambition is for DTC to outgrow wholesale, and it is happening. E-commerce and its own stores, with new flagships in cities including São Paulo and Copenhagen, are growing faster than the wholesale accounts.

But the more telling detail is what On did with wholesale in 2026. In the second quarter, the company described "disciplined wholesale management in a promotional environment, especially in the Americas, to protect full price integrity," and warned that "wholesale actions in Q2 and Q3" would hold back short-term growth (On Q2 2026 results). In plain terms: On chose to put less product into a discounting channel, and accepted slower growth to keep its shoes selling at full price.

That is the same decision Crocs is making with HEYDUDE, from the opposite end of the brand-health spectrum. A brand that protects its price in wholesale is a brand that can launch into a new category without arriving on the discount rack. We broke down the HEYDUDE reset separately.

Athletes as developers, not billboards

The Mbappé deal is not a conventional boot sponsorship, and the structure tells you how On thinks about product.

On describes the arrangement as an entrepreneurial relationship containing cash and equity incentives, per an On spokesperson quoted by CityAM. Mbappé is a global ambassador, but he is also a development partner who will "work directly with On's product teams" on football footwear and apparel, testing and shaping them from the start (On press release, 18 September 2026). His financial outcome is tied to whether the football business works, not just to wearing the product.

There is precedent. Roger Federer joined On as a co-owner and product collaborator in 2019, and On used the same model to enter tennis: an elite athlete inside the development process rather than in front of a camera. Thierry Henry, now Director of Football, had been working "behind the scenes with the brand on every aspect of its entry and product approach since late 2025" before the role was made public (On press release, 18 September 2026). Sydney Schertenleib, the Switzerland and Barcelona player, joined in December 2025 and now leads testing for the women's game.

Read the dates. Henry started in late 2025. The announcement came in September 2026. The football operation was roughly ten months old before anyone outside On knew it existed.

The technology, and why it changes the operational problem

On is not putting its logo on a boot made in a contract factory. It is bringing its own manufacturing process into a category that process was not designed for.

LightSpray, introduced in 2024, replaces a cut-and-stitched upper with one built by a robotic arm spraying a continuous thermoplastic filament around a foot-shaped mould. The upper takes minutes to produce. It carries more than 250 patents, part of a company-wide portfolio of over 650, and On runs LightSpray production in its own factories in Zurich and Korea, with more under construction (Sporting Goods Intelligence, On Investor Day, 22 September 2026). As the company put it at its Investor Day, On does not only make the shoes. It makes the machines that make the shoes.

That is the detail that reframes the whole football project. For a typical footwear brand, entering a new category means briefing a factory in Asia, agreeing minimums and lead times, and managing a supplier. For On, entering football with LightSpray means new production capacity it owns, new machine programming for a different upper, and a manufacturing footprint it has to build rather than buy. The capital sits inside On, not with a contract manufacturer. So does the risk.

And a football boot is not a running shoe with studs. The upper has to handle a struck ball, lateral cutting, and wet grass. The plate and stud configuration is a separate engineering problem from anything in On's current range. LightSpray has proven itself on a lightweight racing upper. It has not yet proven itself on a boot that gets kicked for ninety minutes.

What has to exist before the first boot ships

This is the part of the story that does not make the sports pages, and it is the part that decides whether the announcement turns into revenue.

A new category means a new product development cycle, with prototypes tested by a deliberately small group of elite players, and iterated until the product works at professional level. It means new materials and a new bill of materials. It means production capacity that does not exist yet, on machines On has to build and site. It means demand forecasting with no sales history to forecast from, for a product in sizes, colours and stud types the business has never sold. It means new wholesale relationships, because football is sold through specialist retailers On has never traded with. And it means an apparel range alongside the boots, in a category where kit is half the business.

The timeline reflects all of that. On's own guidance is a "true market entry" in 2027, but only through limited drops. Full cleats and a complete performance apparel range are not expected until 2028 (Sporting Goods Intelligence, On Investor Day). That is a year later than the headline date most coverage ran with, and it is the honest one. Roughly two years between the announcement and the product being properly on sale, with the whole operation being built in between.

The Mbappé signing bought On the attention. The two years are where the business gets made or not.

And then golf

Football is not the only new category. At its Investor Day in Zurich on 22 September, four days after the football announcement, On set out a strategy running to 2029 that includes an expansion into golf alongside running, tennis, lifestyle and apparel (Sporting Goods Intelligence, On Investor Day). The shares closed up 7.6% on the day.

Two new categories in one week is a statement of ambition. It is also two new product development programmes, two new sets of production requirements, two new channels, and two new demand forecasts, all running in parallel on top of a running business still growing 20% a quarter.

What could go wrong

A fair read includes the risks, and there are real ones.

Football boots are one of the most concentrated categories in sportswear. Nike, Adidas and Puma have decades of relationships with professional players, clubs and specialist retailers, and the boot a player wears on a Saturday is often the one their team is contracted to. On has no football heritage, no club deals, and no track record in the specialist retail channel that sells boots.

The technology is unproven in the category. LightSpray works on a racing shoe. A boot is a different mechanical problem, and On has said as much by putting a two-year development window on it.

The financials carry their own pressure. Net income fell in FY2025 despite 30% sales growth. On is deliberately holding back wholesale growth in the Americas in 2026 to protect price, which costs top line. Its guidance excludes the possibility of tariff refunds it may be owed in the second half of 2026, a reminder that its US import costs are a live issue (On Q2 2026 results). And the stock had been weak going into the Investor Day; the football weekend and the 2029 plan produced a rally, but it was a rally from a low.

The honest summary is that On has built exactly the kind of business that can afford to enter football: premium margin, strong cash, a growing direct channel, proprietary manufacturing, and a proven model for developing product with athletes rather than around them. What it has not yet done is make a football boot that works, build the capacity to produce it at scale, or sell a single pair through a football retailer. The announcement was the easy part. Everything that matters happens between now and 2028.

What this means if you run a scaling brand

You are not signing Mbappé. But every brand that has ever launched a second category, a new product line, or an entry into a new channel has faced a smaller version of exactly this, and the lessons scale down cleanly.

Build the operation before the announcement, not after it. Henry was working inside On for ten months before the press release. The announcement came when there was an operation behind it. Brands that do this the other way round, launching the category and then scrambling to source, forecast and fulfil it, are the ones that end up with stockouts on the launch product and cash tied up in the sizes nobody bought.

A new category is a new business, not an extension. New product means new suppliers, new lead times, new minimums, and a demand forecast built from nothing. The first order for a new line is the hardest buy you will ever make, because there is no run rate to base it on. If you are about to launch a category, our note on inventory forecasting methods covers how to forecast without history, and weeks of cover is the discipline that stops the launch buy becoming a warehouse of unsold stock.

Protect the price before you scale the channel. On held wholesale back to keep its shoes selling at full price, and it is entering football from that position rather than from the discount rack. A brand that has trained its channel to expect markdowns cannot launch a premium product into it. Crocs learned that with HEYDUDE the expensive way.

Own the thing that makes you different. On's edge in football is not Mbappé, it is a manufacturing process nobody else has, built in factories it owns, protected by patents it holds. At a smaller scale the equivalent is the supplier relationship, the fabric, the process or the fulfilment setup that a competitor cannot copy by placing the same order with the same factory. That is what turns attention into a business, and it is operational, not marketing.

The celebrity partnership is the part everyone sees. The planning, product development, manufacturing capacity and distribution that turn it into revenue are the part almost nobody does. That is usually where the work is, and it is usually where we come in.

If you are about to launch into a new category or channel and want a second pair of eyes on the forecast, the supply base and the fulfilment behind it, see how we work.