How Asics’ New CEO Is Overcoming The Company’s Challenges

Asics CEO Gene McCarthy
Asics CEO Gene McCarthy.
Courtesy of brand.

Despite a year of sales jumps and groundbreaking technology advances, Asics is finishing 2015 facing sizable challenges.

From the outside, Asics’ recent successes across multiple platforms are clear: Its last quarter showed an 8.5 percent gain in currency-neutral net sales, and the brand launched its most innovative running shoe to date — the Gel-Quantum 360.

It also re-signed Olympic gold medal-winning wrestler Jordan Burroughs and collaborated on lifestyle sneakers with leading boutique retail stores, including Bait and Alife.

But this fall, the company was sued by Size It LLC and investor Mickey Segal, who claimed Asics failed to make good on plans to expand the company’s U.S. presence, resulting in the shuttering of 13 stores.

The Times Square location was one of those 13 units, closing weeks before the Asics-sponsored TCS New York City Marathon. That move forced the brand to reopen a closed location on 14th Street.

In September, former CEO and President Kevin Wulff announced his retirement, with industry veteran Gene McCarthy taking his place on Oct. 1. McCarthy’s experience includes stints at Merrell, Under Armour, Nike, Reebok, Timberland and Jordan Brand.

Asics Gel-Quantum 360 The Asics Gel-Quantum 360. Courtesy of brand.

 

The Asics role isn’t just a résumé booster in preparation for McCarthy’s next job — the former NCAA Division One Track & Field All American at Fordham University said coming to Asics is personal.

“When I was a kid — when the shoes were called Onitsuka Tiger — I wore them. I competed in Onitsuka Tiger,” McCarthy said. “This is full circle for me, personally and professionally. I came here to help. I’m not here to drive my career.”

Some high-profile industry executives believe Asics made the right choice in selecting McCarthy. “Gene understands the power of brands, going all the way back to his time with Jordan Brand years ago,” said Dick Johnson, CEO and president of Foot Locker. “Asics has a big, broad brand, and their progress will continue under Gene’s leadership.”

McCarthy shared his vision of where Asics is headed.

How will your experience with other brands affect how you run Asics?
Gene McCarthy: I’ve been fortunate to have worked with some of the most famous brands in the world, and I’ve also been with labels that have gone through major transformative times. I’m not here to take any one of those brands and retrofit the idea into Asics. At this phase in our growth, there is a [goal] to get to $1 billion in this region, the largest region for Asics globally. But the path to get to the next phase of growth is not going to be the same as the first.

A brand guy who has a long-term vision — as opposed to an operator — is what Asics needs at this time. You have to be strategic and have objectives, and then when you vet it and launch
it, you have to have the patience to stick with it. The pace of this industry is faster than other areas, and because of the consumer influence — and this is the most powerful consumer in history — the pace is going to get frenetic. I want to make sure we stay even and ahead rather than chasing from behind.

After working in a variety of roles, how would you describe the way you manage your teams?
GM: Very open and inclusive. I like banter at the table, I like the idea that we can disagree and then go out after. But after a certain point, the democracy closes and I have to be the decision maker. My youngest son asked me what I do for a living, and I told him my job is to look, listen, think and decide. I’m very open to hearing what everyone has to say. The other thing about my style is, I like to be provocative and take risks because you can always peddle backwards, but if you’re conservative, it’s really hard to peddle upstream.

What does Asics do well, and what do you think it needs to improve on?
GM: The craftsmanship and quality of the product is exquisite, and everyone in the shoe-building side of the industry knows that. We need to have more of an emotional connection, as a brand, with our consumers, both the ones we serve as well and those we seek to serve. We [also] need to be experts at the consumer experience, because the dynamic of the marketplace is changing rapidly and how we view our own stores and certainly our online experience has to be critical to us. It also helps our wholesale partners if we do that correctly.

How do you make Asics more competitive in an athletic world ruled by giants, particularly Nike?
GM: We need to raise our profile. There have been a lot of things Asics has accomplished that have been firsts for the industry, and we need to champion them. [We need] a consistent global message, and there’s new talent that our headquarters in Japan has brought in, along with me, whom I’ve met with here in New York who are terrific. In my role, it’s the Americas, not America; I have to treat it as a region and make sure our culture has synergy but that we’re aware of and responsive to local nuances.

Asics' New York City Marathon signage Asics’ New York City Marathon signage. Courtesy of brand.

Who is Asics’ core customer today?
GM: A runner. And when I use the term “runner,” I’m referring to someone who has the idea of running in his or her mind. It could be a very fast runner or people at the Marathon — all 50,000 of them — those are the people we focus on and the people we adore, and they adore us back. And then there are people who just like running shoes. That’s the largest part of the market, and I don’t want to be exclusive — we should never punish people because they don’t run as fast as somebody else. We want to celebrate them as well.

How closely will you work with the parent company in Japan? What are the challenges of having your colleagues on the other side of the world?
GM: It affects my sleep — I was on the phone last night until 1 a.m. with Japan for an important issue. The colleagues I have, there’s a connection among us not only in business sensibility but personally, and that happened in a short period of time, which goes to show you this is going to be a great brand. Sometimes the distance doesn’t affect us.

Are there any updates on the lawsuit filed by Size It LLC and Mickey Segal?
GM: I joined this brand for many reasons: I’m at a point in my life where I can be selective, but one of the main reasons I picked Asics is its business integrity. While we’re aware of the lawsuit, I can tell you confidently that it is without merit — it’s baseless, frivolous and we are confident as we vigorously pursue this in the courts that the courts will agree with us and the suit will be dismissed.

How is it affecting Asics’ operations?
GM: It has no material effect on our business because we have lots of levers to pull, but I’m proud of the fact that we’re sitting in [the 14th Street] store right now, which was closed for a while and just reopened this week, and it looks terrific. We’re allowing this to be a statement that we’re back and that we will have a strategic and aggressive plan for both our stores and online in the near future.