Under Armour is having a "hard time living up to its own rallying cry" as the company "faces fierce price competition from larger rivals," according to Aaron Gregg of the WASHINGTON POST. Changing consumer preferences has "sent its shoppers online and into the arms of a bevy of new contenders," and investors have "taken note," sending the stock down 36% year-to-date. The resulting tumult has "led to the biggest challenge yet" for UA Founder, Chair & CEO Kevin Plank. UA’s execs "cast the company as a victim of its own success, a still-ascendant titan of retail that now must pivot to stay profitable." Plank said, "We’re admittedly making less money, but we’re using that money to invest in our business. ... The terrain has changed, and so must we." Gregg noted UA is "hardly the only casualty of the shake-up in retail." Nike "has suffered," as it "announced a round of layoffs earlier this summer." But unlike Nike and Adidas, UA is "still largely a domestic player." Analysts said that the company is "making impressive strides in China." But about 80% of the company’s sales are still "constrained to the North American market." Meanwhile, growth in North America is "occurring in retro and casual clothing and shoe lines, bringing fresh attention to brands such as Puma and Skechers." Nike has "responded by bringing back some of its earlier offerings." The resurgence of "retro styles puts Under Armour in a difficult position." UA recently named Patrik Frisk President & COO, and Plank said Frisk is tasked with "aligning the entire company around digital." The company also "seeks to transition into the market for so-called casual sportswear and footwear" (WASHINGTON POST, 8/7).
BREAKING THE MOLD: In Baltimore, Jeff Barker noted workplace image is "critical" to brands like UA and Nike, as they "frequently compete for the same executives, designers and other employees." Plank has "identified its women’s lines as particularly promising opportunities for growth." But that sort of pivot Plank describes "will be a challenge." UA noted that 48% of its 14,000 employees are women, and females account for about 25% of those at the VP level, but complaints that the company "has a 'male culture' appear periodically on the jobs site Glassdoor." However, UA "generally gets positive reviews as a workplace on the site." UA Senior VP/Global Brand Management Adrienne Lofton said, "The industry is male-dominated, and that is a hangover from many, many years of sort of the old standard of what it looks like to live and work in sports." Barker noted UA reached $1B in women’s sales last year out of $4.8B total revenues. But that share has "stayed mostly in the 20-30% range for years" (Baltimore SUN, 8/5).
