New Balance’s $10 Billion Plan

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When thinking about challenger brands in the sneaker market, New Balance might not be the first name that comes to mind. The 117-year-old company predates upstarts like Swiss running brand On and Deckers-owned running label Hoka by more than a century.

But while the brand has historically kept relatively quiet compared to bigger names such as Nike, Adidas and Puma, even remaining privately owned, a radical transformation over the past decade has put it firmly in a cluster of fast-growing brands collectively taking market share from the industry’s incumbents. In 2023, sales grew 23 percent versus the prior year to reach $6.5 billion. New Balance’s goal is to increase that figure to $10 billion in the next few years.

To reach that target, president and chief executive officer Joe Preston, who joined the brand in 1995 and took over the top job in 2018, doesn’t plan to change a thing.

The brand’s aim in the year ahead is to stay on course and focus on what’s been working. That includes managing distribution to ensure it isn’t oversaturating the marketplace with any one style, maintaining close relationships with wholesale partners and retaining the company’s laser-focused approach to picking the right brand partners — not just the most famous ones — be they athletes like Sydney McLaughlin-Levrone or designers like Teddy Santis.

BoF: What has New Balance been doing right that its competitors are not doing?

Joe Preston: For us, it’s all about controlling our destiny. That’s all grounded in trying to make sure that we are close to the consumer, understanding how they want to shop, where they want to shop and when they want to shop, then also being finely attuned to the trends that are taking place out there and making sure that we are delivering products and experiences that put us at the intersection between sport and fashion, between sport and music. That’s where, we believe, is great energy.

BoF: New Balance is far older than many of its competitors. Do you think of yourselves as a challenger brand?

JP: Yes, we absolutely try to operate with that mindset. We are not as big as the two biggest players within the industry. [Therefore], we need to make sure we are operating in a way that’s true to who we are but also disruptive in a way that upstart brands, challenger brands, can be.

BoF: Do you feel that being a private company has been helpful in that?

JP: I definitely think in some areas it helps us. It allows us to take the longer view. A good example of that is US manufacturing. We’re the only athletic brand that has factories here in the US: two in Massachusetts, and up in Maine we have [three] factories up there. We’ve just added a new one in New Hampshire. All of our competitors — most of them are public — have tried to do this in the past and have given up. We believe, for us, that it provides a great way to drive innovation. We’ve opened up a new manufacturing R&D centre here in Boston, about a mile from our headquarters.

BoF: Are there any other advantages to manufacturing some products domestically?

JP: I think it absolutely helps us from a quality standpoint. We are making the shoes. [We’re] designing the processes that go into making those shoes and that in and of itself drives stronger quality with the product that we’re making with the contract manufacturers. I fundamentally believe that it’s a real strength of our company as a result.

BoF: How much emphasis do you place on innovation?

JP: We’ve made two significant investments: one on the manufacturing side, with the opening of a new manufacturing innovation centre; the second one is a product innovation centre that resides inside of our New Balance track, literally across the street from our global headquarters. That is all about delivering the best product to the best athletes in the world, who we’re working individually with. [We’re] also taking those insights and making sure we’re driving innovation for the everyday athlete. Then we also want to make sure we are being innovative all across our company. We’re trying to make sure that we are staying up to date, or ahead, in tech innovation that allows us to get closer to that consumer, allows us to spot trends earlier, [and] most importantly, to respond to those trends earlier in time to be meaningful.

Authenticity is a really powerful element of a brand’s DNA … That’s a real differentiator that we have versus some of the other brands that are trying to challenge the two big brands.

BoF: How do you mine your archive to bring forward untapped retro products or innovative products based on retro designs?

JP: We feel really fortunate [for] just the number of products that we have that were so grounded in innovation and performance at the time, so they’re really authentic. That allows us to bring them back to life in a manner that remains interesting through colour and material, but really trying to stay true to what that product was. Our design teams are constantly looking back at our catalogue to see if there’s anything that would resonate with what’s happening in today’s environment. Some of those you see brought forward, and others are still there because the teams are waiting for a moment that aligns with some of the trends taking place around the globe.

BoF: Do you anticipate long-term interest in these retro styles?

JP: I think authenticity is a really powerful element of a brand’s DNA. As younger consumers come into the category who are trying to understand a brand, where they came from, what made them be who they are, I think that’s always going to be important. Now it can ebb and flow on what’s in style from a silhouette standpoint, but I think authenticity is a key. That’s a real differentiator that we have versus some of the other brands that are trying to challenge the two big brands.

BoF: How do you determine the right amount of product to put into the market while also wanting to maximise sales and not leave money on the table?

JP: There’s an art and a science to it. There’s a math equation you can do, and you also have to have a feel for the market. That is a combination of being able to have strong analytical teams [and] have people on your teams that understand the marketplace. I think that experience that we have within our marketplace management, whether it comes from merchandising or within the field, is a really important element.

BoF: The sneaker market is more competitive today than ever before. How do you see this dynamic playing out?

JP: The marketplace has been disruptive for the past 15 years. For the first 10 of those, it was primarily around retail and the shift from consumers shopping solely in stores to shopping more online. Within our sector, because of the price points and because of the hands-on nature of the product, it allows for the opening of stores by brands. I think that combination of us being a retailer and a great partner to our wholesalers is helping to fuel our rise because we’re able to present ourselves in the best way.

BoF: How do you strike the right balance between direct sales and wholesale?

JP: We believe wholesale is a really important part of reaching the consumer. We pride ourselves on trying to be a good partner for our wholesale partners. We believe it’s an integral part of our growth and the health of our brand and the health of the industry. At the same time, we also know that our focus on DTC allows us to present the brand in the best way, and we believe that combination is very powerful.

That combination of us being a retailer and a great partner to our wholesalers is helping to fuel our rise.

BoF: This year has seen a big convergence between the sports and fashion industries. What’s New Balance’s approach now when evaluating who to partner with?

JP: The same as we approach any business relationship that we have: we’re looking for individuals or companies that we believe share the same values as we do. I think the one thing that separates us from our competitors with our relationship with these athletes, or with someone in the fashion world, is the bespoke approach that we take. Our goal is to be a premium sports brand, and we want to make sure we align ourselves with partners that feel the same way. Then we take an individualised approach to not just the product development but the execution and how that comes to life. I think that combination has proven to be successful for us.

This interview has been edited and condensed.

This article first appeared in The State of Fashion 2025, an in-depth report on the global fashion industry, co-published by BoF and McKinsey & Company.