Prime Highlights-
- Asics will spin off Onitsuka Tiger into a wholly owned subsidiary called OT Group, effective January 1, with no plans for a public listing.
- The brand will re-enter the US market with a flagship store in Los Angeles in February, after withdrawing previously due to management disagreements.
Key Facts-
- Onitsuka Tiger sales jumped 43% last year to 136.5 billion yen, with a profit margin of nearly 38%.
- Asics shares have risen sevenfold over the past five years, giving the company a market value of around $20 billion.
Background-
Japan’s Asics will spin off its Onitsuka Tiger brand into a wholly owned subsidiary called OT Group, a move the company says will speed up decision-making and give the fast-growing label more independence.
The company split takes effect on January 1, with Ryoji Shoda named as Chief Executive Officer of the newly created OT Group. Asics Chief Executive Officer Yasuhito Hirota confirmed at a press conference that there are no plans to list OT Group on any stock exchange.
Onitsuka Tiger has been one of Asics’ strongest performers in recent years, driving four consecutive years of record profit. The brand’s retro-inspired sneakers have surged in popularity across Europe and Asia, helped by inbound tourism to Japan and a weaker yen.
The brand recorded strong growth, with revenue reaching 136.5 billion yen last year, while its profit margin approached 38%, leading all of Asics’ major business segments. Asics shares have risen roughly sevenfold over the past five years, giving the company a market value of around $20 billion.
Shoda said the spin-off also clears the path for Onitsuka Tiger to re-enter the United States, where the brand pulled out previously due to management disagreements over the balance between fashion and sport. A flagship store will open in Los Angeles in February. Further flagship openings are planned for Tokyo’s Shinjuku district, Nagoya, Shanghai, Milan, and Seoul.
Tatsunori Kawai, chief strategist at Mitsubishi UFJ ESmart Securities, said the spin-off makes strong sense for a brand growing at this pace, noting that large organisations tend to slow down as approval layers multiply.
Onitsuka Tiger, whose yellow-and-black Tai-chi sneakers appeared in Quentin Tarantino’s Kill Bill, appointed K-pop artist Momo of TWICE as brand ambassador in 2022.