How to Revive a Brand (Part I of II)
Every brand has an expiration date. How do they revive? [Part I of II]
Before the turnaround
By 2017, signs were clear. ASICS was in trouble.
Until 2015, the brand had a steady growth, reaching $3.7 billion in revenue. But in 2016 and 2017, it saw a consecutive decline, down to $3.51 billion. This didn’t stop. For five successive years, ASICS bled money. 2020 marked its lowest point.
However, it’s been able to stage a turnaround of sorts since then. ASICS reached $4.08 billion in 2023, the highest revenue in its 75-year corporate history.
This is Part I of a two-part analysis of the brand’s turnaround over the last few years.
Humiliation
On January 2nd and 3rd of each year, there is an annual running relay race called “Hakone Ekiden” in Japan.
It’s a collegiate tradition among 21 universities. 2024 was the event’s centennial. The level of recognition, attention, and excitement around this event is similar to what we see for the Super Bowl in the US. Each university puts forward its top ten runners and collectively, they cover over 200 km, about 135 miles, among ten of them over two days. That’s more than 10 hours of airtime.
This also has become the battleground for athletic footwear brands to showcase and win the hearts and minds of runners in Japan. From a branding perspective, a 10-hour live event with a rather repetitive motion is a golden opportunity for any company to have its products showcased and demonstrated by real users.
ASICS built its business by focusing on running. Many runners, especially the serious ones, have trusted ASICS shoes for years. It used to be the premier sponsor for the New York City Marathon, the biggest marathon event of its kind in the world. 2016 was the last year that ASICS sponsored it.
In the following few years, various pressures on ASICS further weakened the company. A product innovation called Vaporfly from Nike, an outsized shoe outsole that could improve run times by up to 4.2%, took the running market by storm. At the same time, the rise of newcomers like On and Hokka gaining market share didn’t help ASICS either.
In January of 2021, the brand hit rock bottom.
The number of runners wearing ASICS shoes at Hakone Ekiden, the barometer of trust by runners in Japan, in 2021 was 0. Yes, zero. No runner wore ASICS shoes to compete in the biggest running event in the nation.
Nike was the dominant brand with 95.7% of runners wearing its shoes that year in the race.
Imagine the opposite. Say, at a running race in Oregon, Nike’s home turf, 95% of runners wearing ASICS and no one with Nike on.
“Humiliating” would be an understatement. But that was January 2nd, 2021, for ASICS in Japan at Hakone Ekiden.
Considering that there would be no Nike without ASICS, the degree of humiliation cut even deeper for the aging brand.
It seemed ASICS, as a brand, had expired.
The depth of respect
“In my two-decade career at Nike, I remember only two emails from Phil Knight.”
A friend of mine and a long-time veteran of Nike shared with me, referring to the company’s legendary and enigmatic co-founder.
“One was in 2001 when September 11 happened,” they said.
I was already living in the US at the time so I understood the gravity and severity of this event as it changed some of the preconceived constructs of our society.
“The other was when Mr. Kihachiro Onitsuka died.”
My friend told me. I was shocked.
Kihachiro Onitsuka is the founder of Onitsuka, a Japanese footwear company that later became ASICS. Onitsuka was 44 years old and Knight was 24 when they first met in Kobe, Japan in 1962.
The origin of Nike is well-documented in Knight’s best-seller “Shoe Dog” as well as numerous articles and blogs. Without Kihachiro Onitsuka, there would be no Phil Knight or Nike as we know them today. It’s also extremely well known that Onitsuka and Knight had a major fallout, with both companies suing each other.
In 1973, nine years after their partnership started, Knight filed a $33 million lawsuit against Onitsuka.
Blue Ribbon Sports (BRS), the former version of Nike, was the exclusive distributor of Onitsuka’s shoes, starting with Onitsuka Tiger, in the US. As BRS developed its brand identity separate from Onitsuka, tensions arose, leading to a significant rift between the two companies. Legal battles, including a lawsuit over the iconic "Cortez" shoe design, marked the end of their partnership, shaping their separate paths in the athletic footwear industry.
One could argue that it was this conflict that gave birth to a global and iconic powerhouse brand that is Nike today.
Many years after the lawsuit, Onitsuka said in his article “My Resume” in Nikkei Newspaper that “[Knight’s] desire to start a business with nothing but his bare hands reminded me of myself walking around the country with a backpack when the company was founded, and I decided to give this young man a chance to be a distributor.”
Onitsuka had given Knight a chance to start something that would later overtake its partner way beyond his, Onitsuka’s, or anyone else’s imagination.
Despite their fallout, Knight paying homage to Onitsuka, in one of the only two all-staff emails he sent out in two decades, shows the depth of respect for Onitsuka and his unspoken appreciation for the Japanese elder.
It’s easier said than done to show this type of respect and appreciation, especially publicly.
The turnaround
A lot has been written about Nike and it’s not much use to write about one of the world’s most famous and successful brands and add more noise to the mix.
We think we can learn from the best brands. We can, to an extent, but those darling brands that get mentioned a lot—Nike and Apple being the two most cited brands when it comes to brand-building—have the kind of assets that most companies don’t.
Take Apple, for example, the greatest turnaround in the history of business. It’s a great story and yes, there’s a lot to learn from but 99.999% of us aren’t Steve Jobs. Or have $162 billion in cash.
Case studies from the likes of Nike or Apple sound inspirational but they are often unrealistic or impractical to most.
Instead, let’s talk about ASICS, a much more modest brand whose products have been mocked as dad shoes for years before someone else made them cool.
Between 2015 to 2020, ASICS’s revenue shrunk from $3.7 billion to $3.1 billion.
However, since 2021, the brand has managed to do a turnaround and has added a billion dollars to its topline. Its revenue in 2023 was at $4.08 billion, an increase of over 31% in a few years and the highest in its corporate history.
This is small in the era of Big Tech and hyper-growth. Anyone who’s run a business knows, though, that turning a declining business around and creating sustained growth over multiple years is no easy feat. It requires a systematic change to the organization and its thinking.
There are instances where a sudden increase in a business is possible. And that often happens in the form of a hit product. Stanley’s Tumbler is a recent example that became a viral hit and gave the brand a huge boost.
In ASICS’s case, it needed much deeper reengineering of its brand and approach to revive the expired brand and get to where it is now.
In Part II of this essay, I break down what it took for ASICS to make this turnaround and share the inside story based on my direct working relationship with the brand.
Thanks for reading. Please hit reply with any feedback, thoughts, or questions. I’d love to hear from you.