On, a sneaker company headquartered in Switzerland, has built an empire on striking shoe designs. Championed and popularized by tennis star Roger Federer, it now faces a potential legal crisis. In response, customers have brought a class action lawsuit. The recalls state that their well-loved sneaker models, more prominently the Cloudmonster and Cloudrunner, create a “loud and awkward-sounding squeak.” RIDE on news of better-than-expected earnings in late August. That’s a big deal, so much so that their quarterly revenue was given a nice shot in the arm due to DTC sales.
The lawsuit alleges that On had the ability, and technical know-how, to fix the squeaking problem but didn’t take the necessary steps to do so. Customers claim that many sneaker models are unusable even if subjected to “extensive DIY alterations.” This complaint has gained traction as many users report daily inconveniences caused by the noise, especially those in professions such as nursing, who rely on comfortable footwear during long shifts.
While we believe all of these models should be recalled, we have pointed out the Cloudmonster and Cloudrunner models as especially dangerous. One customer noted that she was “no longer able to use her shoes as intended due to the embarrassment and annoyance” caused by the squeaking. This negative sentiment is the result of a rapidly growing discontent among consumers who were promised an unbeatable level of performance from the brand.
On’s sneakers are known for their pioneering “CloudTec” technology. With this execution, their design provides each wearer a more individualized experience, allowing them to feel like they’re “running on clouds.” Often costing upwards of $200 (£150), these shoes have developed a cult-like fandom for their unique look and all-day wearability. These new complaints could erode the company’s positive market position.
Though the lawsuit remains pending, On has undeniably crushed it monetarily, even outperforming some of its larger publicly traded competitors. The company reported a large increase in direct-to-consumer sales, driving much of the positive surprise in its last earnings report. Analysts don’t reject the lawsuit, but agree that it faces significant hurdles. The brand’s popularity and robust sales numbers could dampen impact.
So far, On has not responded to requests for comment on the lawsuit. The company’s flagship store in New York City usually attracts a couple of thousand customers a day. They can’t get enough of putting on and buying the goods out there. The blowback on the new sneakers may have a longer-term effect on sales and consumer goodwill that hurts Nike in the future.