SBD/February 18, 2013/Marketing and Sponsorship

Under Armour Opens Brand House Store In Baltimore, Seeking To Appeal To Women

Brand House's staff of about 25 people mostly are experts in specific sports
Customers who entered Under Armour's new 6,100-square-foot Brand House in the Harbor East area on Saturday had “little choice but to think ‘Baltimore,’” according to Chris Korman of the Baltimore SUN. The shirts displayed at the front of the store “promote Baltimore neighborhoods,” and banners next to the main entrance “honor NFL great Ray Lewis and the Ravens.” Retired swimmer Michael Phelps “adorns the side of the building facing the water.” UA VP/Apparel, Outdoor & Accessories Henry Stafford said that the store also “reflects Under Armour's global ambition.” Its focus on UA’s “underperforming footwear lines and the new lifestyle T-shirts reflecting Baltimore culture break from the retail tradition of selling hardest what sells best.” Stafford said that though UA has “no specific plans to expand the concept to other cities, that is the goal.” He said that Brand House “will complement the retail stores that now sell Under Armour gear while offering fans a way to experience the full spectrum of the company's offerings.” The company is “evolving, and Brand House appears to be at the heart of that change.” Sporting Goods Intelligence Publisher John Horan said, “They’re trying to make their branding more inclusive, to try to resonate with women and around the world.” Korman noted the Brand House staff of "about 25 are mostly experts in specific sports.” Stafford said, “You want to run a marathon, we’ll have someone here who can tell you, from firsthand knowledge, about the gear you’ll need to run a marathon.” Brand House also “will be the first place to showcase -- and eventually sell -- the Armour39 workout monitoring system.” Plans to “build signature retail space” at UA’s HQs across the water from the Harbor East store are “on hold” (Baltimore SUN, 2/16). BLOOMBERG NEWS’ Matt Townsend wrote the new store is “a pitch to the Lululemon crowd.” The outreach to women is “part of efforts to broaden out beyond performance apparel and become the next" Nike or adidas. Stafford said the store will be “a lot more balanced in terms of being exciting for our male consumers as well as our female consumers” (BLOOMBERG NEWS, 2/15).

GETTING READY FOR A BATTLE: CNBC's Maria Bartiromo reported the opening of the store shows that UA execs are "making a renewed push into retail and perhaps taking their battle with Nike to a new level.” CNBC’s Brian Shactman was on-site at the new Baltimore UA store, noting the company is using the store as a “test lab, focusing on women, focusing on shoes and maybe even setting themselves up for international expansion." KKM Financial Founder & CEO Jeff Kilburg said UA is “really hitting the nail on the head with this ‘I Will’ campaign they just launched." Kilburg noted, “Look at the overseas expansion, only 6% of sales come in from overseas. They’re going to grow.” The Seaport Group Equity Strategist Abigail Doolittle said UA has "actually started to reverse its three-year uptrend” which indicates the “buyers are becoming less enthusiastic.” But Doolittle said “When I look at Nike, I see a beautiful uptrend” (“Closing Bell,” CNBC, 2/15).

HOMETOWN DEAL: In Portland, Allan Brettman wrote over the past two decades, Nike built its Oregon HQs "with no financial incentives from Washington County,” but “times appear to be changing.” Ongoing talks between the company, Washington County, Portland and state officials “that began in the middle of last year involve plenty of incentives.” The talks so far have “resulted in Oregon assuring Nike it would be taxed only [on] its sales within the state for the next 30 years.” Portland city officials also “expanded the city's eastside enterprise zone to include property on the west side of the Willamette River in a way that would accommodate a possible Nike construction site.” And Beaverton is “seeking to expand an enterprise zone boundary to include Nike's existing headquarters as well as a company-owned parcel believed to be a possible expansion site.” Nike’s expansion in Oregon will -- as “required under the agreement with the state" -- be valued at a minimum of $150M and must "be completed by 2016 and result in at least 500 full-time jobs” (Portland OREGONIAN, 2/16).
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