# On Holding Pushes DTC to 35% of Sales, Lifts Gross Margin 260 bps in 2026 Plan *Swiss running brand prioritizes owned retail and web channel over wholesale to protect profitability as volume scales.* By **Jenny Huang Goodman MPA MSc MHSA, Principal** — The Stash Edge, Hako Shikin LLC. Published 2026-09-17. Canonical: https://www.pops4.com/stash/articles/on-holding-2026-09-17t21-2 Subject: On Holding Tags: dtc, margin expansion, channel strategy, on holding, owned retail, wholesale economics --- On Holding, the Swiss performance-running brand trading on the New York Stock Exchange, is steering revenue growth through its direct-to-consumer channel to expand gross profit margins, according to The Motley Fool. The company projects DTC will account for approximately **35 percent** of net sales in 2026, up from **32 percent** in 2024, driving gross margin improvement of **260 basis points** year-over-year. The shift reduces reliance on third-party retail, where wholesale terms compress unit economics, and channels more volume through owned stores and the brand's web property, where full-price realization and customer data flow directly to the company. On operates **68** branded retail locations globally as of the fourth quarter 2025 and continues expanding its footprint in North America and Europe. The brand also runs a subscription model called Cyclon, which ships a fully recyclable running shoe on a regular cadence and reclaims the prior pair for materials recovery. Both the retail network and the subscription program feed first-party purchase data into inventory planning and product development, tightening the feedback loop between customer behavior and assortment decisions. The Motley Fool notes that DTC expansion allows On to test new colorways and limited releases without negotiating shelf space or promotional windows with retail partners, preserving brand positioning and avoiding the markdown calendar that governs wholesale distribution. The mechanism behind the margin lift is structural. Wholesale terms typically require **50 to 55 percent** off suggested retail to cover the retailer's margin, logistics, and promotional risk. DTC captures the full retail price minus only the brand's own cost of fulfillment, customer acquisition, and return handling. At scale, that spread drives gross margin into the mid-**60s** for owned channels versus mid-**40s** for wholesale, according to investor presentations cited by The Motley Fool. The brand also retains pricing control, avoiding the race to discount that wholesale partners initiate during seasonal clearance. On reported net sales of **CHF 2.1 billion** in 2024, with gross margin of **60.1 percent**, and expects gross margin to reach **62 percent** in 2026 as DTC mix rises and supply-chain efficiencies compound. A small physical-product brand can run the same play without opening storefronts. Build a Shopify site with clean product pages, high-resolution imagery, and customer reviews, and drive traffic through organic social content that documents the product in use. Allocate **15 percent** of monthly revenue to paid acquisition across Meta and Google, targeting lookalike audiences based on prior purchasers. Price the product at full retail on your owned site, then offer wholesale terms only to retail partners who commit to minimum order quantities and agree not to discount below a floor price within the first **90 days**. Use email and SMS to convert one-time buyers into repeat customers, offering early access to new releases and colorways before wholesale partners receive inventory. Track contribution margin by channel weekly, and shift inventory allocation toward the channel that delivers the highest net dollar per unit. If wholesale partners push for deeper terms, hold firm or redirect that inventory to owned digital, where you control the narrative and the margin. The incremental cost to fulfill a DTC order is often **$8 to $12** per unit including shipping, far below the **50 percent** concession required to land on a retailer's shelf. On's playbook confirms that margin expansion does not require volume sacrifice. The brand grew net sales **30 percent** year-over-year in 2024 while increasing gross margin, proving that owned distribution can scale profitably when acquisition cost remains disciplined and repeat purchase rates climb. The lesson for any physical-product marketer is that channel mix is a margin lever as powerful as cost reduction, and DTC remains the highest-return path when customer acquisition efficiency holds. ## The takeaway On Holding lifted gross margin **260 bps** by shifting **35%** of sales to owned retail and web, capturing full-price realization without wholesale concessions. --- ## Publisher **Hako Shikin LLC** — Virginia Beach, Virginia. Founded 1997. ASI 217876 · DUNS 18-204-6339. Principal and author: **Jenny Huang Goodman MPA MSc MHSA**. - Author: https://www.huanggoodman.com/about - LLM context: https://www.pops4.com/stash/llms.txt - MCP endpoint, for AI agents: https://mcp.pops4.com/mcp - Client dashboard: https://dashboard.pops4.com/ - Catalogue: 70,000+ products, 200+ brands