# On Holding Targets 30% DTC Revenue Mix to Drive Gross Margin Expansion Past 61%

*Premium running brand shifts from wholesale dependence to owned-channel control as margin lever for 2026.*

By **Jenny Huang Goodman MPA MSc MHSA, Principal** — The Stash Edge, Hako Shikin LLC.
Published 2026-09-16.

Canonical: https://www.pops4.com/stash/articles/on-holding-2026-09-16t18-2
Subject: On Holding
Tags: dtc, margin expansion, distribution strategy, premium positioning, wholesale, owned retail

---

On Holding told investors in its 2026 outlook that direct-to-consumer channels—company-owned stores and its online shop—are the primary driver of planned gross margin expansion, according to The Motley Fool. The Swiss premium running brand projects that shifting revenue mix away from wholesale toward DTC will push gross margins above **61%** in 2026, up from **60.1%** in 2024. The company currently derives roughly **30%** of revenue from DTC channels, a figure it plans to increase through deliberate retail expansion and digital investment.

On Holding operates **66** owned retail stores globally and continues opening flagship locations in high-traffic metropolitan markets. The brand's DTC channel carries gross margins approximately **15-20** percentage points higher than wholesale, where retailer markups and promotional pressures compress profitability. By routing more volume through owned touchpoints, On Holding captures the full retail margin and controls the brand experience end-to-end, from product presentation to customer data.

The mechanism works because premium physical product brands face a structural trade-off: wholesale scales distribution fast but surrenders margin and customer relationship. DTC inverts that equation. On Holding sells the same running shoe at the same **$160** retail price whether through Nordstrom or its own SoHo store, but in the owned channel it keeps the **50-55%** wholesale markup that would otherwise go to the retailer. That margin delta funds the cost of operating stores and digital infrastructure, with surplus flowing to gross profit. The brand's premium positioning—shoes engineered with CloudTec cushioning, marketed to performance runners willing to pay for differentiation—means customers accept buying direct without needing a discount to convert.

The playbook also carries a data advantage. Every DTC transaction feeds first-party customer data—purchase history, size preferences, email engagement—that informs product development, inventory allocation, and retention marketing. Wholesale sales generate revenue but leave the brand blind to who bought, why, and what they might want next. On Holding has leveraged its DTC data to refine its product line, discontinuing low-margin SKUs and doubling down on hero models that repeat-purchase.

A small physical-product brand can run the same margin-expansion play without building a flagship store network. Start by identifying your highest-margin product—typically your hero SKU or limited-edition variant—and route **100%** of its volume through your own Shopify site, removing it from wholesale availability. Price it at full retail, no promotions, and reinvest the margin gain into acquisition: **$8-12** Meta ads targeting customers who already buy your category, creative focused on the specific product feature your wholesale partners undersell. A candle brand might pull its best-selling seasonal scent from wholesale and run it DTC-only, using the **$18** per-unit margin gain to fund a **$600** monthly Meta budget that drives **50-75** new customers at **$8-10** CAC. Ship in branded packaging with a repeat-purchase incentive—**15% off** next order, minimum **$50**—to build the owned customer file. Track repeat rate; if it exceeds **25%** within 90 days, expand the DTC-only assortment.

The broader pattern: premium brands that control margin control destiny. On Holding's 2026 outlook is a public declaration that wholesale growth, while easier to scale, is a profitability ceiling. The DTC shift requires upfront investment—store leases, digital infrastructure, acquisition cost—but it converts revenue into enterprise value because owned customers and owned margin compound. For a physical-product brand at any scale, the move is the same: identify where you're surrendering margin to distribution, take one product direct, and prove the unit economics before expanding the play.

## The takeaway

Route your hero SKU direct-only, reinvest the margin gain into acquisition, and build the owned customer file that compounds.

---

## 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