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Volume 20 No. 42
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Shoe executive’s exit leaves analysts with some questions about Under Armour

Under Armour Inc. is used to making waves in the sportswear industry, and Gene McCarthy’s resignation as the sports apparel company’s top footwear executive certainly caused a few ripples — although not in the way in which Under Armour is accustomed.

McCarthy resigned from Baltimore-based Under Armour on Jan. 24. The former global director of sales and retail marketing for Jordan Brand at Nike, McCarthy was hired in 2009 to make Under Armour a top player in the shoe market.

McCarthy is at least the fourth high-level executive to leave Under Armour since August 2011, a departure rate that worries some industry analysts.

Under Armour’s footwear line increased its annual revenue from $136.2 million to $239 million during McCarthy’s 3 1/2 years at the helm, a steady but unspectacular rate of growth.

McCarthy’s exit “is concerning after a number of high profile departures over the past year,” analyst Michael Binetti of UBS Investment Bank said in a research note.

Chris Svezia, a senior analyst with Susquehanna Financial, said, “There has been more executive departures [with Under Armour] than any other company I cover.”

Under Armour’s growth often means the company has to hire executives from the outside, Chief Financial Officer Brad Dickerson has said. The company’s departures also get far more press attention than the talent Under Armour brings in, he said.

The biggest effect of McCarthy’s departure will be in Under Armour’s footwear business. The 17-year-old company still controls just a small portion of the national, non-cleats shoe market. Under Armour captured 1.8 percent of the $7.5 billion running shoe market in 2012 and 0.6 percent of the $3.7 billion basketball shoe market, said Matt Powell, a retail analyst with Charlotte-based SportsOneSource.

Kip Fulks, Under Armour’s former chief operating officer, now heads the company’s footwear department.

Looking beyond footwear, Under Armour last week unveiled its biggest marketing campaign to date, showcasing the brand’s crop of young endorsers outfitted in the company’s latest products. The campaign, dubbed “I Will,” includes athletes such as Bryce Harper, reigning National League Rookie of the Year.

Jack Lambert writes for the Baltimore Business Journal, an affiliated publication.