For a 70-year-old company, there is a great deal of newness inside Asics Corp.’s Boston headquarters.
FN visited last month, days after the global launch of the athletic brand’s latest marquee running shoe, the MetaRide, and there are posters and displays throughout the space celebrating the recent addition to the portfolio.
And the year-old office itself, dubbed the Creation Studio, is still looking quite fresh — with nary a brown leaf on the logoed living green wall. Then, of course, there are the personnel changes. As home to the U.S. product, marketing and sales groups, the space has recently welcomed several new team members as part of Asics’ effort to re-energize its American operations.
In February, Koichiro Kodama, president and CEO of the Americas group, replaced Gene McCarthy, who had led Asics’ U.S. arm since 2015. Other new faces include Richard Sullivan, EVP of sales, categories and marketing; and Kevin McHale, director of run specialty sales. All have been in their respective roles for less than a month.
The changes are one aspect of the parent company’s plan to regain its footing in the U.S. running market. For full-year 2018, Kobe, Japan-based Asics reported significant losses in the Americas region, with revenues dropping 15 percent to 90.2 billion yen (or $806 million), contributing to a 3.4 percent total decline in global sales. And according to The NPD Group Inc., Asics has fallen to No. 3 in the U.S. run specialty channel, with 10 percent of market share in 2018.
Kodama is well-versed in the challenges and opportunities for Asics. Though he joined the organization three years ago, the executive spent more than 25 years at Marubeni Corp., working with Asics on product and sourcing.
As he charts the path forward, Kodama — who will split his time between Boston and the Irvine, Calif., offices — is respectful of Asics’ long history but also determined to create a unified message for the brand. “We are now focusing on who we are: performance running. This is our core; this is us,” he said. “Of course that cascades down to casual or lifestyle goods, but performance is the core of us. This won’t change.”
Here, Kodama and Sullivan share their strategy for getting Asics back to the front of the pack.
How does it feel to be leading such a historic brand at this milestone?
Koichiro Kodama: “It’s very exciting. I have many good partners here and in Japan. So I am motivated and have only positive thinking. Hitting 70 is wonderful, but it’s been a long and winding road from a standpoint of when Kihachiro Onitsuka started this great brand. I assume he didn’t expect we [would be] here today 70 years later. [There have been] many issues, many problems, but we are still here. I personally want to celebrate that we managed to continue this kind of same message, same philosophy, same DNA of the brand and products.”
What are the main goals for your new leadership team?
Richard Sullivan: “We have to get back to our roots of focusing on run specialty, especially in the North American market. We will continue to innovate. We just launched MetaRide, and everything has been positive so far. We have to take that innovation and ground that in running and the run specialty channel. We have to fix a few things operationally and refocus some of our resources in that channel, but there’s no question that is the direction we’re going in.”
Kodama: “Next year, we are one of the host members for the 2020 Tokyo Olympic Games. It is a really huge event in Japan, and we are a Japanese brand with Japanese heritage, so that is [a time] for us to deliver the message and the products and our philosophy [‘sound mind, sound body’] to the people.”
The lifestyle market has been very strong recently. Why do you see so much opportunity in performance?
Sullivan: “The performance market in the U.S. is still greater than the lifestyle market, so that’s definitely a positive. And if we can ground ourselves in performance, that’s aspirational for many consumers across a broader spectrum. The luxury we have is that we’ve got 70 years of performance products that transcend into our lifestyle.”
How will you change the minds of consumers and retailers in North America?
Kodama: “This morning, I visited one of our run specialty accounts. Most people I have met [are excited that] Asics is back. Without Asics’ success, [they] don’t have success. Many people encourage us and say, ‘You have good products already. Don’t be shy.’ So maybe we are struggling to find where is our market, where is our segment, but we have a lot of assets and a lot of background in technology, materialization, biomechanics.”
You have five flagships in the U.S., including a location on New York’s Fifth Avenue. How much do your stores figure into your retail strategy?
Sullivan: “[The flagships] are a great platform to tell our message of footwear, apparel and accessories, and will be part of the plan going forward. But it will be a mix. We’re looking at our wholesale partners, we’re looking at online, we’re looking at how the consumers shop. I think there’s a part to play for each — brick-and-mortar, our wholesale partners, as well as online.”
Where will we see new innovations from the brand?
Sullivan: “Mostly in performance footwear. That is what started our company, and that’s where we will speak most loudly. But we don’t create technology just for technology’s sake. The MetaRide has been in the works for two years, with 70 prototypes. We launch new innovations when it’s right for the marketplace and the consumer and the athlete.”
Who are today’s athletic customers, and what do they want?
Sullivan: “Fitness has changed over the years; people do many different things. In a focus group, we spoke to a woman who told us, ‘I run a 5K three times a week.’ We said, ‘So you’re a runner.’ And she responded, ‘No, I’m not a runner.’ It’s a different mindset that the consumer has. But I don’t think we should deviate [from our plans]. Our mantra will be to continue to innovate in many different performance products so athletes can perform better, whether it’s a 5K run, marathon or whether you’re playing tennis.”
Kodama-san, you have years of experience in the Asian market, and Richard, you previously led the Canadian team. Is there anything unique about American consumers?
Kodama: “In Japan, in the past, I don’t think the young people wore sport shoes in the working community — only on the weekend do they wear them. In the U.S. market, everybody wears them [all the time].”
Sullivan: “The U.S. marketplace is different, but I don’t know if the consumer is that different. Trends happen quicker and die quicker in the U.S. than in a smaller market like Canada. But the fact is that if you win in this market, you win everywhere.”
What are your biggest challenges right now?
Kodama: “My mission is, I want our people to go [forward together]. Our leadership team tries to eliminate any kind of anxiety or uncertainty, to say, ‘OK, we will go this way.’ And we believe this way [is right] because of our roots, because of our strong points. I want to people-motivate, and I want to people-engage. I want many people to participate.”
What is your vision for the brand in the next five years?
Kodama: “The market is changing very fast, so maybe nobody could tell [what the market will be] in five years. But we are not too afraid for that because we have something in mind for our brand and our products. We [will maintain] this with our technology, with our mentality created by our founder 70 years ago. Still, this five years will be a long and winding road, but we have confidence in us — in our products, in our development, in our people.”
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