Roger Federer's On Stake: A Masterclass in Brand Equity and Enduring Wealth Creation

The enduring legacy of Roger Federer, one of tennis's greatest icons, extends far beyond the court. His disciplined investment in Swiss athletic brand On Holding AG (ONON) since 2019 has become a blueprint for how strategic alignment with premium brands—and the disciplined cultivation of long-term brand equity—can yield extraordinary financial returns. Federer's 3% stake in On, now valued at approximately $500 million as of Q2 2025, exemplifies a rare combination of celebrity clout, market foresight, and corporate synergy. For investors, this case study underscores the power of betting on timeless brands tethered to scandal-free icons who drive premium pricing and unshakable loyalty.

The Federer-On Partnership: A Strategic Masterstroke

Federer's involvement with On began not through a high-profile deal but organically: his wife, Mirka, initially purchased the brand's sneakers during a casual shopping trip. This serendipitous encounter led to a partnership with founders Olivier Bernhard and Caspar Coppetti, who saw Federer's global appeal as a catalyst to elevate On from a niche Swiss brand to a global performance footwear leader.

The deal was a calculated move:
- Federer invested in On's 2019 pre-IPO round, acquiring a 3% stake.
- He became the face of its premium tennis line, the Roger Pro, which blends his on-court legacy with On's proprietary technologies like LightSpray™ (a responsive midsole system).
- Crucially, Federer's endorsement avoided the pitfalls of overexposure, instead focusing on authenticity and technical innovation—a stark contrast to short-lived celebrity-endorsed products that dilute brand value.

On's Financial Performance: A Growth Machine Built on Brand Discipline

Federer's stake has thrived due to On's relentless focus on premiumization and strategic expansion. Key metrics underscore its ascent:

- 1-year return (as of 6/2025): 34.49% (vs. S&P 500's 12.59%).
- 3-year return: 186.99% (vs. S&P 500's 58.28%).

On's success stems from three pillars:
1. Direct-to-Consumer (DTC) Growth: DTC sales surged 40.3% in 2024, now representing 48.8% of Q4 2024 sales, as the brand prioritizes high-margin retail channels.
2. Global Market Penetration:
- Americas: Dominant with 27.4% sales growth, fueled by DTC store openings.
- Asia-Pacific: Explosive 84.5% growth in 2024, signaling untapped potential in emerging markets.
3. Premium Brand Positioning: On's gross margin of 60.6% (2024) rivals luxury brands like Nike and Adidas, reflecting its ability to command $200+ price points for performance footwear.

Why Federer's Endorsement Works: The Scandal-Free Premium

Federer's appeal as an enduring, trustworthy icon is central to On's success. Unlike brands tied to athletes embroiled in controversies, On's partnership with Federer—a career marked by professionalism, grace, and longevity—has no skeletons to undermine its brand equity. This reliability allows On to:
- Attract high-net-worth consumers who prioritize legacy and craftsmanship over fleeting trends.
- Command premium pricing through collaborations with influencers like Zendaya and FKA twigs, extending its reach beyond sports to lifestyle markets.
- Maintain loyalty in an era where brands rise and fall with social media whims.

Risks and the Case for Long-Term Investors

On is not without challenges:
- Competitive pressures: Rivals like Nike and Adidas continue to innovate in running categories.
- Geopolitical risks: A strong U.S. dollar and supply chain disruptions could pressure margins.

However, On's cash-rich balance sheet (CHF 924 million as of 2024) and strategic focus on high-margin DTC and apparel sales position it to navigate these hurdles. For investors, the key is recognizing that On's value isn't just its stock price—it's its brand moat, fortified by Federer's credibility and the premium pricing power of its products.

Investment Thesis: Bet on Brands, Not Just Stocks

Federer's On stake teaches investors to prioritize long-term brand equity over short-term gains. Here's how to apply this lesson:
1. Seek partnerships with scandal-free icons: Brands aligned with enduring, respected figures (e.g., Serena Williams, Tom Brady) are more likely to build lasting loyalty.
2. Demand premium pricing power: Avoid brands in commoditized markets; focus on companies (like On) that justify high margins through innovation and brand prestige.
3. Embrace disciplined growth: On's restrained expansion—e.g., prioritizing quality stores over quantity—shows that scale without strategy can destroy value.

Conclusion: The Roger Federer Effect

Federer's On stake isn't just a financial win—it's a masterclass in how celebrity influence, brand integrity, and strategic patience can create generational wealth. For investors, On's trajectory signals a broader truth: in an era of volatility, brands rooted in timeless appeal and premium quality are the safest bets. As On continues to leverage Federer's legacy while expanding into new markets, its story serves as a roadmap for sustainable wealth creation—a blend of star power, smart business, and the unshakable allure of a name synonymous with excellence.

Investors should take note: the next big wealth creator may not be a tech disruptor, but a brand that marries iconic credibility with disciplined execution—just like On.