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“On is a company that is still run as it was in the 90s and has a business model as it was from the last century. The focus is solely on shareholder value. That the administrators can get paid as much money as possible as quickly as possible. This system is ultimately based on exploitation.”

The criticism from reputation expert Bernhard Bauhofer in an interview with Watson was unmistakable. The reason for the conversation was research by K-Tipps into the margins of the Swiss shoe brand On, in which Roger Federer is involved. The consumer magazine evaluated confidential customs data and analyzed shoe models from On and other manufacturers.

Margin: Up to a factor of 20

On has its shoes produced in Vietnam and achieves high margins. For example, the “Cloudaway” model costs 200 francs; the purchase price is 20.73 francs. Add to that 14.99 francs Swiss VAT and 1.70 francs freight and customs costs.

The margin is largest for the most expensive On shoe, the “Cloudtilt Loewe”. The production costs there amount to 20.80 francs per pair. The model costs 445 francs in Switzerland, which is 20 times the purchase price. With comparable brands, for example Adidas or Puma, the margin is usually considerably lower.

In addition, there is the lack of quality that the K-Tipp shows in tests. Sports doctors describe the shoes as too soft and customers report tendonitis. The consumer magazine quotes a seller of On shoes as follows: “On shoes are classic disposable products.”

David Hachfeld has no insight into the margins at On. When asked by Watson, the textile expert from the NGO Public Eye says: “If the trade margin of a brand company is so much greater than the margin of the shoe factories in which the real use value of On products is created by hard work and presumably low wages, but that is true, the balance is not there.”

Good working conditions and living wages require correspondingly high purchase prices, says Hachfeld.

Poverty wages for workers

It’s no secret that athletic shoe manufacturers typically make high margins, continues David Hachfeld. Unfortunately, low purchasing prices of only 10 to 30 francs for sports shoes are common in the sector, as are poverty wages for workers in production. But:

In the clothing industry, a quadrupling of the purchasing price is very common on average. In the discount sector, for example at a label like Chicorée, sometimes less, where you earn above average. The further you go into the luxury segment, the ‘higher’ the margin. “It is no longer about quantity, but about achieving as much profit as possible from each product.”

Regarding On’s argument that they rely on International Labor Organization (ILO) guidelines, Hachfeld says: “All companies say that and it is correct in principle, but it is the bare minimum. Most companies that rely on these standards still have wages in their supply chains that are not enough to live on.”

“I’m curious to see what path On will take.”

Public Eye’s David Hachfeld says On is aware of its responsibility and has committed to improvements, such as paying ‘living wages’ to key suppliers in Vietnam from 2025. However, there is no more detailed information on wages.

According to the NGO, shoe seamstresses in Vietnam earn a monthly minimum wage of 120 to 170 francs for a 48-hour work week. However, according to textile expert Hachfeld, this wage is not enough to finance the life of a family.

Based on K-Tipp’s research, On’s financial scope is now known, says Hachfeld. “Now it is important that these noble objectives do not just remain on paper, as is unfortunately so often the case in the industry, but that On actually sets priorities on fair production. We are curious about what path On will take.”

Reputation expert Bernhard Bauhofer also hopes for a response from the Swiss company, because there is some pressure: “Their customers in Switzerland are often well-educated, higher-earning people. They inform themselves and want to buy products that match their own values.”