On Holding Shares Fall After Brand Ambassador Mbappé's Comments Spark China Backlash

Shares of On Holding AG (NYSE: ONON) declined Tuesday after its global brand ambassador, French soccer star Kylian Mbappé, faced a swift backlash in China over controversial comments about former leader Mao Zedong. The stock fell by as much as nearly 6% before paring losses to trade down approximately 3.5%.

China Backlash

The controversy began after a video circulated online in which Mbappé appeared to refer to a meme superimposing his face on an image of Mao, describing him as "someone—I think he was a dictator in China." The remarks prompted an immediate response in the Chinese market.

Following the incident, two Chinese food and beverage brands announced they were terminating their partnership deals with the Real Madrid forward. Additionally, China's state broadcaster, CCTV, suspended broadcasts of Spain's La Liga matches involving Mbappé and removed all related advertising content, according to a report from Chinese media outlet The Paper, which cited sources within CCTV.

Mbappé has since issued an apology. "I have deep respect for the Chinese people," he said in a statement, adding, "I am deeply sorry for any hurt my comments may have caused anyone."

Impact on On Holding

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The incident presents a significant challenge for On Holding, which signed Mbappé in September of last year as a cornerstone of its strategic push into the global soccer market. The Swiss performance brand appointed the French national as a global brand ambassador with plans to co-develop a line of soccer cleats and athletic apparel.

While the financial terms of the partnership, which includes cash and equity components, were not disclosed, Mbappé's global profile was expected to help On build brand recognition in soccer. The move is central to the company's strategy to expand beyond its core running category and compete with established giants like Nike, Adidas, and Puma.

Market Perspective

For investors, the controversy introduces reputational risk to a high-profile partnership crucial for On's growth ambitions. While the immediate financial impact on On Holding is difficult to quantify, the backlash in a key consumer market like China could complicate its expansion efforts.

On Holding has not yet issued a public statement regarding the matter. It remains uncertain whether Mbappé's apology will be sufficient to repair relationships with Chinese sponsors or what the long-term implications will be for his partnership with the sportswear company.