In July 2014, veteran running industry executive Jim Monahan walked into a largely barren second-floor office on Goodyear Road in Irvine, CA. He settled in behind a desk and began crafting his immediate to-do list. Then, he paused.
For the first time since accepting the position of president of 361 Degrees USA two months prior, Monahan recognized the enormity of the task before him.
“We didn’t even have a single sale to build on. Not one,” says Monahan, who joined 361 Degrees following a decade-long run as vice president of footwear at ASICS. “That’s when I really realized how much work there was to do.”
Instead of being paralyzed by fear, Monahan went to work and has spent the last five years unapologetically and unabashedly focused on pushing 361 Degrees’ growth in the U.S. market, a hefty task that has involved educating running retailers and the public at large about 361 Degrees, battling for space on shoe walls with a litany of legacy players and savvy upstarts and developing a team capable of building a pristine, premium brand positioned to compete.
Those spirited efforts have propelled the upstart Chinese brand’s movement in the U.S. market. In the first half of 2019, 361 Degrees experienced 59 percent growth in revenue and is now in nearly 200 run specialty accounts across North America. Through May of this year, 361 Degrees also boasts the second fastest year-over-year growth rate of penetration in the run specialty channel, coming in at a brisk 240 percent increase, according to Sports Marking Surveys.
“We’re making headway and earning trust,” Monahan says.
Establishing an Identity
Though relatively new to the U.S. retail landscape, 361 Degrees is far from a bit, fly-by-night player. Started in 2003, the public company – one listed on the Hong Kong Stock Exchange for a decade – boasts global revenues of $753 million. By comparison, Brooks Running reported global revenues of $644 million in 2018, a record for the U.S. run specialty channel leader.
Since its founding, 361 Degrees has been active in China’s swelling athletic scene, tapping into the running boom in the world’s most populous nation through some 6000 stores scattered across the country. 361 Degrees was also the official outfitter of Rio 2016 and has been a multi-time sponsor of the Asian Games.
When the Chinese company opened its U.S. office in 2014 it did so in tandem with outposts in Europe and Brazil, aggressive steps to elevate 361 Degrees’ global position as a top athletics brand.
“Company leadership recognizes the importance of being successful beyond the Chinese marketplace,” Monahan says.
For Monahan and the U.S. office, one that includes head of sales Ike Alvear, another seasoned running insider who’s held posts with Hoka One One, Adidas, ASICS and Brooks, that has meant an almost-obsessive focus on the details to produce “damn good running product for the everyday runner.”
“Though it isn’t the sexiest,” Monahan says, “we block and tackle very well and understand fit and comfort matter. We believe the common principles – cushioning, guidance and forefoot flexibility – are important, but have worked to attack those in a more modern way.”
In recent years, 361 Degrees has unveiled its proprietary QU!KFOAM midsole that pairs a plush underfoot feel with a fast, responsive ride, integrated a carbon fiber plate called QU!KSPINE to act as a stabilizing force during the gait cycle, worked to provide a consistent fit in the heel and midfoot through reverse engineering and honed in on the seemingly smallest of details. The footwear’s pressure-free tongue, for instance, routinely earns rave reviews and is an immediately noticeable point of differentiation among those who try the footwear.
“We’re solving that pesky problem of the migrating tongue,” Monahan says. “The littlest details matter to us.”
During a spring demo run at a Marathon Sports location in New England, Alvear stopped behind a group of runners at a traffic light. Eavesdropping on the group’s conversation, he heard them collectively agree that they had forgotten they were wearing new shoes.
“It felt that natural to them, which is about the best compliment we could receive,” Alvear says. “We keep it simple – fit, performance and comfort – because we believe that’s a winning formula.”
When Ken Sung of Michigan-based Gazelle Sports was first introduced to 361 Degrees in 2014, he saw a brand with promise, but product that “wasn’t there yet.” He continued monitoring the brand’s evolution and, noting improvements, began trialing 361 Degrees footwear in one Gazelle unit last year. This past spring, 361 Degrees footwear entered a second Gazelle store.
“361 Degrees is doing better than some of our other niche brands and fits a wide range of customers,” Sung says. “As the quality has improved, it’s become a more compelling option for people.”
Spurred by his familiarity with Monahan and Alvear as well as the duo’s industry track records, Scott Dvorak of the five-unit Charlotte Running Company chain in North Carolina brought 361 Degrees into his stores last year. Today, Dvorak says 361 Degrees is as high as the fourth best-selling footwear brand in some of his doors.
“The product is sound and has a good first fit and feel, which is important these days,” he says.
Particularly interested in niche brands with tighter distribution, Dvorak hopes 361 Degrees continues to guard distribution and present innovative product.
“As a brick-and-mortar retailer, we need to think about ways to set ourselves apart and one way to do that is with niche brands like 361 Degrees,” he says. “Showing new, innovative product that people haven’t seen before is what makes us special.”
To be certain, 361 Degrees is interested in the vibrancy of the run specialty channel.
Since arriving stateside, 361 Degrees has prioritized retailer feedback, actively working to engage retailers to understand their needs, what they want from a brand like 361 Degrees and what’s resonating with consumers. That’s spurred new developments in 361 Degrees’ product line, its go-to-market strategy and its relationships with vendors.
Earlier this year, for instance, 361 Degrees hired its first tech rep and plans to continue putting tech reps in play as local markets develop. The brand is also preparing for the release of its highly advanced midsole foam, QU!KSPRING+, later this year. The highest rebound EVA the company has every produced, QU!KSPRING+ will launch in unity with QU!KFOAM in the Spire 4 to provide runners a distinctive, varied experience.
In early 2020, meanwhile, 361 Degrees will debut the Pacer ST, an everyday speed trainer that aims to bring the fast and flirty story characterized by the likes of Nike’s Vaporfly 4% to everyday consumers.
“We’re a nimble brand interested in building a dialogue and partnership with run specialty retailers,” Monahan says. “We’re not sitting in this office saying we know everything. We believe in collaboration.”
For his part, Dvorak says 361 Degrees has been giving Charlotte Running Company “great support.” When the retailer introduced 361 Degrees into its doors last year, the brand’s regional sales rep spent a week in Charlotte ensuring a smooth start – “Maybe the best launch we’ve ever had with a brand,” Dvorak says – and 361 Degrees has continued to remain engaged in the year since, including offering spiffs for associates.
“I believe our retailers see us as a challenger brand sincere about servicing the channel and being engaged partners,” Alvear says.
Further to that point, 361 Degrees unveiled the 361 Degrees Cup in November 2018. In its inaugural year, 56 U.S. and Canadian retail teams comprised of more than 400 associates signed up for the retail racing league with a $50,000 prize.
“This has created a level of banter among the channel and offers us an opportunity to celebrate running and associates across the country,” Alvear says.
Eager to Succeed
These layered efforts have translated into results. According to Monahan, 361 Degrees’ remaining open order book is more than 100 percent ahead of its 2018 pace.
“The retailers who have gotten behind us realize we’re a viable option,” Monahan says.
The gains are encouraging, especially from where Monahan started five years ago, but the 361 Degrees president is far from content. He pledges continued investment in service to the channel and, above all, product designed to resonate with consumers.
“As the industry has swung from minimalism to maximalism, we’ve been a part of it all,” Monahan says, a nod to the long careers he and Alvear have both enjoyed in the running marketplace. “We’re taking the learnings from these perspectives and bringing compelling products to market.”
And that’s what retailers like Sung, who don’t have infinite budgets and space, want to see.
“I hope they put more value into the footwear, that they stay updated on midsole technology and ride,” Sung says. “In my opinion, this is what will give 361 Degrees more credibility as they expand out.”
While 361 Degrees has made undeniable gains in the channel, Monahan understands skepticism remains and there are retailers hesitant to take a shot on a novel brand.
“So, the onus is on us to be consistent, to improve and be patient,” he says. “There are no free passes and we understand shelf space is earned.”