How Dad Shoes Turned New Balance Into A 5 Billion Brand

When you picture the $91 billion sneaker market, what brands come to mind? Nike? Maybe Adidas? What about New Balance? Where does the running shoe fit into the picture? New Balance has always been a really reliable running shoe.

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Born by chubby white guys in their late 30s to early 40s.

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Did Steve Jobs wear New Balance when he launched the iPhone? Perfect, perfect shoe.

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I cannot wait to wear these. When I think of New Balance, I think of dads, even though I'm currently wearing New Balances.

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New Balance ended 2022 with a revenue of $5.3 billion.

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A new generation of top athletes, influencers, celebrities, and hype beasts have pushed the brand into the spotlight.

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I feel like the past couple of years, it has been harder to get pairs that I want because New Balance is so popular now.

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Here's how the company that was once seen as the home of the ugly dad shoe became a fashion forward brand.

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This is suddenly obsessed. Yeah, these are the Minnie Mouse's.

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You can only buy these at Disney World.

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I bought my first pair of New Balance around 1994. It was the 496 model.

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They were 40 bucks at the time. I am Richie Rojas and I collect New Balance sneakers.

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I have over 600 pairs. 43 year old Richie Rojas's 600 pair New Balance collection features both new and vintage sneakers along with New Balance clothing and memorabilia.

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I definitely got made fun of a lot in high school because most people wearing Nikes and Jordans, only a handful of us in school had New Balances.

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Today, Richie is constantly scouring websites and thrift stores searching for rare and unique New Balance models.

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I think what sets New Balance apart is the quality and the comfort. They just last longer than other brands.

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And that's, you know, a big reason why I started collecting them in the first place. In 2013, Rojas started the Instagram account New Balance 365 to keep track of his growing collection.

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Today, his page has almost 18,000 followers. I don't really care about selling any of my sneakers or making money off of them.

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That's not really my goal. Richie may not be interested in resale, but a lot of people are.

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New Balance sales have grown for four straight years on the retail site StockX.

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It's one of the top five traded sneaker brands on the site. The most popular styles are from the New Balance 550 Ame Leon D'Or collection and the New Balance Kith Sprint collection.

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Richie bought this special edition sneaker at retail for $200.

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The same pair recently sold for $2,000. So the resale market can do a lot for building up buzz around the brand and building brand heat.

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There are a few things that you really need to see a brand do and New Balance has done very well.

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First off, you have to have trend right product, right? If the product is not good, it's off trend, it's not exciting to the consumer, it's not going to work.

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Secondly, you have to manage supply very, very carefully. A big part of a sneaker resale culture is this idea that people want what they can have.

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New Balance has done a good job having product that is for the masses, but then also having this carve out of their assortment where supply is intentionally restricted and kept below demand so that it can drive higher resale value and drive buzz and heat for the brand.

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This buzz is an only seen in resale. New Balance's $5.3 billion in sales in 2022 represent a 21% increase over the previous year.

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But compared to other footwear companies, New Balance is still a small fish in a big pond.

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In 2022, rivals like Nike and Adidas were still many times bigger than the Boston brand.

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Still, New Balance's recent popularity is helping its revenue grow faster each year than its competitors.

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To fully understand the sudden popularity New Balance is experiencing right now, we need to go back to the beginning of the story.

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The company was founded in 1906 when William J. Reilly created an arch insert inspired by the design of a chicken foot.

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His goal was to alleviate pain for people working on their feet all day. The arch inserts turned into a full shoe in 1938 when the brand created its first New Balance running shoe.

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In 1941, New Balance began selling shoes for other sports like tennis, boxing, and baseball.

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New Balance was a top running shoe option all the way through the 1970s, the same decade that the iconic "N" logo was added to its line of products.

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But competition was on the horizon. I'd say in the 80s and 90s, that was when you saw the emergence and really the ascendance of Nike that made things difficult for New Balance and other participants in the marketplace.

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Nike took the footwear market by storm. And with athletes like Michael Jordan backing the brand, it quickly grew in both popularity and market share.

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Nike was very aggressive, very innovative. It had an impact on New Balance and it negatively impacted the perception of the brand.

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While competitors were racing to recruit stars, New Balance took a different approach.

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The company's "Endorsed by No One" ad campaign was designed to let its shoes speak for themselves.

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They didn't believe in sponsoring athletes, right? And now it's like, if you want to compete with Nike and Adidas, you have to.

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In 2004, New Balance shook things up, releasing a collaboration with UK retailer Offspring.

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The partnership was a success, and in the years since, New Balance has worked with brands like Kiff, Amelion D'Or, and Joe Freshwoods.

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These collabs have helped give New Balance a cool factor that has taken its reputation from this.

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I don't think New Balances are that cool. They are pretty basic to me.

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They don't really stand out from the crowd. Every dad has them that he's had, I think, since the 80s.

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He wears them with his khakis and his button down buttoned in, and it feels very suburban dad.

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To this. I just cracked and got a new pair because New Balance is back. New Balance seems cool because all the cool girls are being comfortable now instead of wearing heels to work, and I support that.

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Around 2010, consumers began prioritizing comfort over fashion, and athleisure brands benefited from this shift.

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Lululemon, for example, saw its revenue double in just four years.

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And New Balance suddenly found itself in a position to capitalize on changing consumer tastes.

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When you saw the trend shift away from performance and towards casual, that was a perfect storm for New Balance.

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Not only had they been doing a lot of work to build up the credibility of the brand and the fashion aspects of the brand, but now this brand that was known for "the dad shoe," which was a very, very comfortable shoe, well now all of a sudden that became in vogue and that was a big beneficiary to New Balance.

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And it created a halo for the rest of New Balance's assortment that has helped drive the growth that we've seen over the past four or five years.

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The pivotal moment came in 2017 when French luxury fashion house Balenciaga debuted a chunky sneaker called the Triple S.

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Suddenly, the dad shoe was high fashion. What is a dad shoe? That's a good question.

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I imagine it to be something kind of ugly, usually like all white leather.

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I don't know, you always see memes of people mowing lawns or barbecuing in them.

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New Balance was already known as a bit of a "chunky shoe." So then when you saw high fashion runways highlighting shoes with chunky outsole, then that probably trickled down to the athletic market as well, which was another reason that New Balance gained favor with consumers.

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While the Triple S sold for over $1,000, New Balance's similar chunky styles cost a fraction of that.

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As the brand's popularity picked up, it was spotted on the feet of celebrities like Hailey Bieber, Kendall Jenner, and Ryan Reynolds.

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And it wasn't just the dad shoe getting attention. I think New Balance, they're more than just a dad shoe trend.

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They have worked to diversify the brand. They've said publicly that they do over $5 billion of revenue annually.

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You can't do $5 billion worth of revenue of selling just quote unquote "dad shoes."

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Over the past decade, New Balance has made a concerted effort to grow its brand, investing in partnerships with star athletes like the NBA's Kawhi Leonard and baseball's Shohei Otani.

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And in 2021, it brought on Amelion D'Or founder Teddy Santis as creative director of its Made in USA line.

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Definitely more collaborations. Their director definitely did an awesome job pushing interesting projects out there.

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You see New Balance ads like on NBA games and national TV networks.

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I feel like that was never a thing before. It was only like in running magazines and things like that.

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New Balance has also benefited off of Gen Z's style influence and obsession with the 1990s.

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I think when you have a brand that has as long and rich a history as New Balance has, it's very easy to participate in retro trends.

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The emergence of 90s fashion coming back. A brand like New Balance that clearly has been around since the 1990s and earlier, they're able to capitalize on that trend by going into the vault and either re-releasing shoes that came out back then or shoes that are inspired by the 1990s style.

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I think we're in like a very nostalgic age of fashion right now. I think ironically the dad shoe kind of falls into that.

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Put together, all of these key moments of changes have helped put New Balance in the conversation with its much bigger rivals.

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The view of the New Balance brand today is drastically different than what it was 10 years ago.

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They've got a much bigger lifestyle component of the brand. There's a much bigger fashion aspect of the brand.

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They've done collaborations with fashion designers and it's a much cooler brand today than it was 10 years ago.

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I think New Balance is a brand that's building itself for a long term future and not just coasting on a trend.

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And New Balance appears to be on the right track. CEO Joe Preston has said the company could hit $10 billion in sales over the next few years.

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But no matter what happens, longtime fans like Richie will continue to support New Balance.

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At the end of the day, New Balance will always hold onto its roots as a running brand. They will never abandon that.

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I always thought that was like cool and different. Kind of nerdy in a way, you know, and nerdy also begins with N.

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And that's kind of why I liked it in the first place. So for me, New Balance will always be in style.