Under Armour To End Production Of Wearable Fitness Trackers, Changing Up High-End Line
Under Armour following its Q3 earnings report yesterday said that it is "implementing several changes, including stopping making wearable fitness trackers and instead focusing on improving software through its suite of apps," according to Sara Germano of the WALL STREET JOURNAL. A UA spokesperson said that the company would "continue to sell its UA Health Band, UA Scale and UA Heart Rate devices through the remainder of the year." As of yesterday afternoon, the devices were on sale on UA's website for "between 38% and 66% off." Meanwhile, UA President of Sport Fashion Ben Pruess has "left the company." Pruess co-led the "design and launch of its high-end line, then known as Under Armour Sportswear, or UAS, in a bid to garner more fashion credibility for the traditional sportswear brand." The spokesperson said that UAS would now be "integrated across categories such as running, women’s and basketball, instead of as a stand-alone segment," and that designer Tim Coppens "will be launching a spring/summer" line. Future editions of UAS, which now stands for Under Armour Sportstyle, will be "codesigned by celebrity collaborators, including the rapper A$AP Rocky." Execs said that UA would "work internally to reorient its sales plan to be more direct-to-consumer, a move that follows similar efforts by rivals as the U.S. wholesale sportswear business has slowed" (WSJ.com, 10/31).
CROWDED MARKET: WOMEN'S WEAR DAILY's Palmieri & Hays wrote UA "continues to lose ground against Nike and a newly revived Adidas, and as hot streetwear brands like Supreme generate buzz -- and sales -- by organizing regular product 'drops' that quickly sell out" (WWD.com, 10/31). USA TODAY's Nathan Bomey writes under the header, "Under Armour Not Connecting With Female Customers" (USA TODAY, 11/1). In DC, Abha Bhattarai notes although UA "racks up billions of dollars in sales each year, analysts say it has failed to drum up much loyalty among its customers" (WASHINGTON POST, 11/1).
TECH ISSUES: UA said that an IT upgrade was "partially to blame for a decline" in Q3 sales. UA President & COO Patrik Frisk said implementation issues with a new SAP SE integrated ERP tool, deployed in July, “caused disruption in our supply chain operations during the quarter.” UA CFO David Bergman said the company was "working through" several issues with the SAP software implementation (WALL STREET JOURNAL, 11/1).