SBD/January 27, 2011/Marketing and Sponsorship

Plank Bullish About Under Armour's Forthcoming Cotton Apparel Line

Under Armour Chair & CEO Kevin Plank "knows investors will be surprised" when the brand releases a new line of cotton apparel this spring, but the "move makes financial sense," according to Monte Burke of FORBES. Under Armour will debut the "Charged Cotton" collection through its "line of athletic shirts starting Mar. 12," and Patriots QB Tom Brady will "appear prominently in the Charged Cotton marketing campaign." Plank said, "We looked into our customers’ closets and found 30 T-shirts. Four were synthetic, and the other 26 were cotton. ... There are some people who will still never even consider wearing a synthetic shirt. They like the feel of cotton.  We want those other 26 shirts." UBS apparel analyst Michael Binetti noted that the U.S. cotton activewear market is $12B, "four times the size of the performance-wear market that Under Armour was limited to with its synthetic-only line." Binetti estimates 24% growth in '11 for Under Armour's apparel business, which in '09 "made up 76% of its total revenues." Plank said his primary concern is Under Armour customers thinking "we sold out." But he said, "We're bigger than just one product now. We're a brand." Burke noted Charged Cotton is the "biggest thing Under Armour has ever attempted," and Plank believes that the brand "will overcome any potential consumer confusion." He said, "Time is on our side. Last year Nike was 25 times our size. This year they’ll be 20 times our size, next year 17 times. Which math will you bet on?” (FORBES.com, 1/26).
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