SBJ/March 12 - 18, 2007/Forty Under 40
Published March 12, 2007
Becoming the CEO of a new public company can be compared to an athlete finding fame: The media spotlight can be intense and, at times, unfriendly.
Soon after selling stock to the public in November 2005, Under Armour decided to make footwear, adding to its highly successful performance wear business. Jim Cramer, the hedge fund manager whose show "Mad Money" on CNBC is known for his rants, called the move "dumb as a bag of hammers," Under Armour's chief executive, Kevin Plank, recalled.
Plank is not sure what that means, except that Cramer clearly thought the company was unwise to try to take on heavyweights such as Nike and Adidas.
"That is where you get in trouble, when you let people who spend 10 minutes a quarter looking at your company make the calls," Plank said. "The analysts said we were crazy."
Under Armour did not listen and began selling football, baseball and lacrosse cleats last summer.
Cramer has since changed his tune, and last month, he touted Under Armour as an exciting stock to watch. At the time, Under Armour was trading at around $49 a share, up from a 52-week low of $25.85 last March.
The Baltimore-based company now holds the No. 2 position in cleats at 20 percent behind Nike's 60 percent, Plank said. "We didn't get into this business to be No. 2," he added.
Plank expects Under Armour to quickly move into general footwear, which is sure to attract another rant from the investor community. Still, the company continues to focus on its bread and butter: apparel for athletes. With highly successful endorsements from NFL players, colleges and universities, and most recently a deal with the Chicago Cubs, Under Armour has the platform necessary to showcase its product, according to Plank, who founded the company in 1996 at age 24.
It recently introduced a new line of cold-weather running gear that allows a runner in even frigid temperatures to need only one layer.
Of course, as Plank might attest, running in the cold is also aided by thick skin.
— Daniel Kaplan