Kevin Plank Steps Aside As CEO While UA Looks For Turnaround
Under Armour Founder, Chair & CEO KEVIN PLANK is "stepping down" from his CEO role at the end of the year, as the "once fast-growing company has experienced doldrums in sales" in recent years, according to Lorraine Mirabella of the BALTIMORE SUN. Under Armour President & COO PATRIK FRISK "will assume" the CEO role on Jan. 1, while Plank will "remain the company's executive chairman and assume the new role as 'brand chief.'" Plank "continues to own a controlling stake in the company," while Frisk will "join Plank" on UA's BOD. The company said Plank will focus on "product elevation, amplifying the brand story and stewarding the company's strong team culture." Plank said that Frisk's ascension to CEO has "been in the works for the past couple of years," and even as Plank steps aside, he added that his "priority will remain Under Armour." Analysts today "applauded the transition, calling it a logical succession plan that will bring continuity" (BALTIMORE SUN, 10/22).
KEEP IT SIMPLE: Plank said the company is "really moving from defense to offense," and the "ability and the opportunity we have to do that is something we think is really, really next generation." Plank: "Right now couldn't be a better time for us to do it. You're about to see this brand really begin to unleash, and it'll empower us. It's going to be freedom. It's going to allow Patrik to make the decisions and run the day-to-day and will allow me to continue the vision and think about what's next for this brand." Plank reiterated this was his decision to step down as CEO with no pressure from his board. Frisk said, "This is about continuity. This is about running the play. This is about turning from defense to offense. We believe we have a strong plan in play and we now want to be able to free up Kevin to be more strategic." Meanwhile, Plank said this "isn't a retirement" and Frisk will "continue reporting to me" ("Squawk Box," CNBC, 10/22).
RIGHT MAN FOR THE JOB: In DC, Rachel Siegel noted since joining UA in July '17, Frisk has "focused on boosting the North American sales business, which had been lagging" (WASHINGTON POST, 10/22). FOOTWEAR NEWS' Samantha McDonald notes Frisk has "nearly three decades of experience in the apparel, footwear and retail industry, previously serving 10-plus years with VF Corp. in a variety of leadership roles." At UA, Frisk has been "tasked with putting plans in place to turn around the stagnant North American business and returning the organization to its performance-driven roots" (FOOTWEARNEWS.com, 10/22). CNBC's Courtney Reagan notes Frisk has been the "heir apparent, though the timing of the transition has not previously been made public" (CNBC.com, 10/22). Reagan said Frisk has "played a key role in the company’s transformation plan,” and he has “helped reshape the supply chain, operations, even retarget Under Armour’s customer" ("Squawk on the Street," CNBC, 10/22).
TIME FOR A TURNAROUND: CNN BUSINESS' Jordan Valinsky notes the changes come amid the company's "struggling North American sales." In its most recent earnings report, UA's sales in the region "declined 3% compared with a year ago." UA's business with outside retailers and its direct sales through its own website/stores "both fell last quarter in the U.S." UA also "lowered its forecast for the region, signaling that the brand expects struggles to persist" (CNN.com, 10/22). The WALL STREET JOURNAL's Khadeeja Safdar notes for years, UA "grew rapidly, adding new products and sponsorships with athletes as it challenged" Nike and Adidas. But in '17, sales "hit a wall," and Plank "moved to restructure the company's operations, cutting jobs and hiring" Frisk (WALL STREET JOURNAL, 10/22). BLOOMBERG NEWS' Eben Novy-Williams writes the CEO change "comes at a logical time." Recovery for UA "has been slow." While competitors "embraced casual consumers and the rapid growth of 'athleisure' apparel, Under Armour remains dedicated to Plank's original goal of billing itself as a performance brand" (BLOOMBERG NEWS, 10/22). UA will report Q3 earnings on Nov. 4 (WWD.com, 10/22).