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| Plank pushed the 7-year-old performance apparel company to $110 million in sales last year. |
Sal Fasciana had something to give. So he gave it to Kevin Plank.
Fasciana, a veteran of the apparel industry for more than four decades, was in the twilight of his career when Plank approached him with a business proposition in 1996.
"This young kid had $100,000 worth of product but no place to make it. He was in trouble," recalls Fasciana, who at that time operated AAA in the USA, a sewing contractor in the small industrial town of Bellaire, Ohio.
So Fasciana made Plank, then a 23-year-old senior at the University of Maryland, a deal: Call AAA with his order each day before noon and the company would make and ship the product by the end of the day.
There — in a red, white and blue warehouse along the Ohio River where Plank would model his slick shirts that pull sweat away from an athlete's body and Fasciana would tell his young client about pricing his product — Under Armour Performance Apparel was born.
"We put [the company] on the map because we made the product and got it there on time," says Fasciana, a Brooklyn native who has since retired to Fort Pierce, Fla. "I took him by the hand and said, 'This is how you do it.' I showed him what he knows today."
Says Plank, now 31: "He's right."
Today, Plank is the wunderkind of the sports apparel world, and Under Armour is one of the hottest brands this side of Starbucks Coffee. Last week at the Super Show trade show in Orlando, the company was named Sporting Goods Business' Apparel Supplier of the Year for the third year in a row.
Just 7 years old, Under Armour has grown from sales of $17,000 in 1996 to sales of nearly $110 million last year, ranking the Baltimore-based company second on Inc. magazine's latest list of the fastest-growing companies.
The company's products — which now include shirts, shorts, pants, socks, hats, underwear and more made from moisture-wicking fabrics — are sold in 5,000 retail stores across the country. Players from 28 of the NFL's 32 teams wear Under Armour products, and the company is the official supplier of Major League Baseball, the NHL, Major League Soccer, USA Baseball and the U.S. ski teams.
Already popular with male athletes, Under Armour broke new ground when it launched its women's gear last January. The company staked out a place in pop culture last summer by introducing its "Protect This House" TV ad campaign, a mantra that has since become the battle cry of athletes across the country.
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| Old teammate Ogbogu (left), the “Protect This House” guy |
"Without a doubt, Under Armour is the dominant brand in the high-tech sports apparel industry," says Michael May, a spokesman for the Florida-based sporting goods trade group SGMA International.
Under Armour controls about 70 percent of the performance apparel market, according to SportScan Info, a market research group in Florida, and the company shows no signs of slowing down. Under Armour employs 260 people — about 140 of whom were hired in 2003 — and is targeting $250 million in sales for 2004, while it staves off emerging competitors and hopeful acquirers.
Working for a living
Kevin Plank was raised in the affluent Washington, D.C., suburb of Kensington, Md., the youngest of five boys born to William and Jayne Plank. Thirteen years separate the oldest son, Bill, from Kevin.
The youngest Plank spent his summers learning the business of his father, a land developer who died of cancer of the blood in January 1993. He also traveled regularly with his mother to such places as Canada, Hawaii and Puerto Rico; Jayne directed the State Department's Office of Legislative and Intergovernmental Affairs from 1982 to 1987 under President Reagan.
Whether he was shoveling snow, mowing grass, parking cars, selling bootlegged T-shirts at concerts, delivering roses on Valentine's Day or tending bar, Kevin Plank has always worked.
"He's one of the hardest workers I've known in my life," says Jayne Plank.
Kevin Plank took his work ethic to Washington's Georgetown Prep and St. John's College High School, from which he graduated in 1990. After another year of prepping at Fork Union Military Academy in rural Virginia, Plank enrolled at the University of Maryland in August 1991.
The first day of his freshman year, Plank met his future wife, Desiree Jacqueline "D.J." Guerzon, while buying books at the student union. The couple celebrated the birth of their son, James, on Aug. 10.
Despite being named to USA Today's honorable mention high school football team in 1990, Plank was not offered a scholarship to play for the Terrapins. Instead, he made the team as a walk-on, eventually earning a scholarship.
Used occasionally as a fullback and linebacker for the Terrapins, Plank excelled as the team's special-teams captain and didn't miss a practice in five years.
"Kevin was 5-10, 220 pounds, not super fast, not super strong. He really didn't fit the profile of what we were looking for," says Dwight Galt, the Terrapins' strength coach. "But he kind of willed his way onto the field. We had no choice but to put him out there."
Now, Plank is the charismatic front man for Under Armour. He's part guy's guy, part CEO, part family man and part salesman.
Building a business
Perhaps Plank's best sales job came in March 1998, when Under Armour was struggling to stay alive.
Plank had spent the previous five months driving round-trip from Baltimore to Moundsville, W.Va., at least twice a week to help Ella Mae Holmes produce and ship Under Armour. Holmes was a former employee of AAA in the USA who continued to sew Plank's product after AAA went out of business in 1997.
Plank would leave Baltimore at 4 a.m., arrive in Moundsville about 8 a.m. and work with Holmes and her boyfriend, Leo Weber, throughout the day. At 8 p.m., Plank would take his shipment to the local FedEx office and drive back to Baltimore.
"Finally, I took them out to dinner at Red Lobster, sat them down and I was like, 'Guys, I know you love West Virginia. But I can't make this four-hour drive anymore. You guys have to move to Baltimore,'" recalls Plank.
A few weeks later, after Plank had found Holmes and Weber a place to live, they moved Under Armour's four pieces of equipment from Moundsville to a 2,500-square-foot office in south Baltimore.
Holmes, a manufacturing supervisor, and Weber still work for Under Armour. "He's so loyal to people who help him," Holmes says of Plank. "And he doesn't forget you."
Holmes isn't the only one to whom Plank has been loyal. When he was building Under Armour, Plank called many of his high school and college friends to ask whether they were interested in joining his attempt to revolutionize the sports apparel industry.
He called former Maryland football players Jamie Bragg and Brian Cummings, who were teammates of Plank when he first designed a skintight, lightweight shirt to wear under his football pads and keep him cooler during summer practices. Plank also called former Fork Union teammates Ryan Wood and Bill McDermond.
Each took the chance and is still with the company.
When Plank needed muscle-bound athletes to model his products for brochures and advertisements, he called Eric Ogbogu, a former Maryland defensive end who plays for the Dallas Cowboys. Ogbogu is the star of the "Protect This House" TV ads.
"When Kevin's got an idea, he'll get as many people as he knows together to help him out," says Craig Fitzgerald, Plank's college roommate and teammate. "To Kevin, that's how a plan works."
Building Under Armour wasn't that easy, though.
Plank initially financed the company with $20,000 of his own money, $40,000 on five credit cards, additional funds from family and friends, and a $250,000 Small Business Administration loan.
In 2001, Plank turned to Washington, D.C.'s Prudent Capital, a subordinated debt fund, to help Under Armour grow. Prudent gave the company an undisclosed amount of debt financing.
"At that point in the company's life, that's what we needed to keep going," Plank says.
Staying a step ahead
Under Armour, which now has its headquarters in downtown Baltimore, has since grown to become the brand of choice for athletes of all types.
The product struck a chord with athletes, particularly football players, Plank says. Athletes say they like Under Armour's sleek look and the lightweight fabric, and they believe the product does what it is intended to do — make them feel more comfortable than if they were wearing a sweat-soaked cotton T-shirt.
"This is a great example of the power of a brand," says May, of the sporting goods association. "It has a name that is relevant to any activity. It has an attractive logo and good placement of the logo on the clothing."
Ken Meehan, executive vice president of Dunham's Sports, a Michigan-based sports retailer, says Under Armour is selling better than any of Dunham's other products. "Every store we hear from, that's what people are asking for," he says.
Under Armour has plans to meet the demand in 2004. The company will launch about 80 new products — about half of which are for women — early in the year. Among them are variations of its "LooseGear" and "Performance Grey" products.
"It's a step ahead of what they've done in the past," says Michael Van Alstyne, senior vice president of apparel for The Sports Authority sporting goods chain, who saw the new products at a sales meeting in Baltimore recently.
Under Armour also recently opened sales and distribution offices in Toronto and Hong Kong, the initial phase of the company's planned growth into international markets.
Meanwhile, Plank has added a new partner to his company. In September, San Francisco-based Rosewood Capital bought about a 10 percent stake in the company, said Chip Adams, the venture firm's managing director.
Rosewood is the only outside investor in Under Armour. Plank's family — himself, his mother and four brothers — and partners Ryan Wood and Kip Fulks also have a stake in the company.
Adams says Plank and Under Armour fit Rosewood's criteria.
"We meet 1,000 CEOs a year," Adams said. "There are few like Kevin with a strong vision, strong leadership and a set of values that create a culture that everyone believes in."
Plank: Buyers target company
Under Armour's competitors want that culture. Sporting goods giants Nike and Adidas and middle-tier companies such as Russell and Champion have entered the performance apparel market, hot after a piece of the business that Plank and Under Armour discovered.
Another competitor, Reebok, is in the third year of a 10-year deal with the NFL to be the league's official performance apparel supplier. Still, NFL players wear logoless Under Armour apparel.
"It almost makes no difference who the competition is, because people love Under Armour," May says.
If competitors can't beat Under Armour, they try to buy it. Plank already has entertained about 10 offers to buy the company that went as far as drawing up terms of a deal, he says. Three of the prospective acquirers were rival brands, though Plank would not divulge which ones.
At this point, Plank says he has no plans to sell Under Armour or take the company public. Adams, the Rosewood investor, confirmed the same, but he did say the topic has come up in conversations with Plank.
"We've still got a lot of work to do," Plank says of his reasons for turning down offers from suitors. "I believe we have all the criteria and all the foundation to one day be the pre-eminent sports brand.
"As foreign as it would be for you to go running in regular shoes, I want it to be just as foreign for you not to work out in your Under Armour."
Scott Graham writes for the Baltimore Business Journal, an affiliated publication.
