Under Armour's Global Plan Paying Dividends, With Branded Stores Expected Outside U.S.
Under Armour on Thursday said that "years of investing in global expansion and footwear is starting to pay off," as consumers are buying into UA's strategy of "transforming itself into an international brand known for performance-based footwear as much as for its core clothing business," according to Lorraine Mirabella of the Baltimore SUN. UA CFO Brad Dickerson said that the company has been "laying the groundwork for international growth and is starting to show results." Mirabella notes UA made its "first international push eight years ago into Europe and now has a presence in markets such as Brazil, Chile, China and Japan." Sterne Agee analyst Sam Poser said UA "is well on its way to becoming the solid #2 player" in the industry, eclipsing adidas. But UBS Securities analyst Michael Binetti said the company faces "intense competition from several established global athletic and footwear brands with significantly larger budgets for product development and marketing." Mirabella notes UA's "fast-growing direct-to-consumer channel -- via branded stores and online -- now accounts for less than" 31% of distribution but will be a "big part of the international growth." The company will have "five Brand House stores" in the U.S. by year's end, but it is "opening more branded stores outside the country." UA also will have "almost 10 in Latin America and China" by the end of '14, and at "least a dozen more that will be owned and run by retail partners" (Baltimore SUN, 7/25).
PLANK DIVING: UA Founder, Chair & CEO Kevin Plank was profiled Thursday by ESPN's Hannah Storm, who noted the story of how Plank turned the company "into a still-growing multi-billion dollar business is almost inconceivable." Plank was asked about what mistakes he has made and what he learned from them. He said, "Our first women's line is one that I'm always quick to say, 'That's a place we learned a lot of lessons.' Our initial strategy that we took was, 'This is going to be a piece of cake: Shrink it and pink it and let's go.'" Storm said UA is "now thinking out of the box, finding new faces, like ballerina Misty Copeland, to market his women's line." Plank: "We've opened up the spectrum of what and who we are. We're now also talking to the athletic female." Storm wondered how UA can maintain its "authenticity when you get to be a multi-billion company?" Plank: "If you're focused on what got us here versus where we're going, you're in the wrong place. Frankly, we're not done until we're the No. 1 brand in the world" ("In Focus With Hannah Storm," ESPN, 7/24).