How To Draw A Under Armour Sign Step By Step
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Here's how Under Armour went from a new hotshot sportswear brand taking on Nike to having a wholly uncertain future
Updated
2020-09-09T19:09:00Z
- Under Armour has fallen into a bit of a rut.
- The company, which has taken a hit to sales amid the pandemic, said Tuesday that it will lay off 600 people, according to a memo from CEO Patrik Frisk obtained by Business Insider.
- In November, the company confirmed it was under federal investigation over its accounting practices.
- Under Armour has dealt with a number of massive problems in the past, including $1.3 billion in leftover merchandise in 2018, shrinking popularity among teens, and a scandal involving executives going to strip clubs and expensing the outings.
- We traced the rise and fall of Under Armour, from its early days as a powerful force in the athletic-wear sphere to its current struggles and decline.
- Visit BusinessInsider.com for more stories.
Under Armour is in trouble.
While similar sports retailers like Nike and Adidas are also posting slumping sales amid the impact of the coronavirus pandemic, Under Armour was already sputtering well before the outbreak. Recently, things have only gotten worse.
The Maryland-based sportswear retailer said Tuesday that it will lay off 600 people, according to a memo from CEO Patrik Frisk obtained by Business Insider.
In May, the company said it was working to extend payment terms for its athletes as a measure to cut costs amid declining sales. The company later announced in June it would be terminating its partnership with UCLA — a $280 million deal signed in 2016 that was originally intended to span 15 years. In a statement to Fox Business, the company said it had not received all of the marketing benefits "for an extended time period" that it had paid for.
The pandemic, however, does not represent Under Armour's only rough patch in recent memory.
Longtime CEO Kevin Plank stepped down from his role last fall. Under Armour announced that Plank, who founded the company in 1996, would become executive chairman and brand chief while his CEO duties would be taken on by COO Patrik Frisk. The company then disclosed in November 2019 that it was under federal investigation over its accounting practices.
Going back further to 2018, Under Armour's leftover inventory had grown by 11% to $1.3 billion in the second quarter. That same year, Under Armour executives were also embroiled in a scandal that involved going to strip clubs on the company's dime, a practice that was officially banned for months, The Wall Street Journal reported.
Under Armour announced a turnaround plan to revive the brand with younger consumers in December 2018. In a press release, the company said Stephanie Pugliese would take over the role of president of Under Armour North America as part of a strategy to further establish the presence of the brand in its home market.
Under Armour wasn't always the trouble-stricken brand that it is today. It once seemed poised to overtake the sportswear market in what seemed like a true Cinderella story.
From its rise to a once-$15 billion athletic-apparel empire to its eventual slow decline, here is the complete story of Under Armour so far.
If you're an Under Armour employee with a story to share, email sciment@businessinsider.com.
The story begins with Kevin Plank, Under Armour's founder and CEO. A team captain on the University of Maryland football team, Plank wanted to design athletic-wear that could withstand sweat and intense activity.
Source: Bethesda Magazine
Plank founded Under Armour in 1996 and designed the first prototype that year. It was called "The Shorty" and was tight, soft, and designed as a base layer to wick away sweat to keep athletes dry.
Source: Under Armour, Business Insider
This performance-enhancing goal is still evident in the Under Armour's clothing today. A recent visit to Under Armour's brand house in New York City revealed a display for the brand's Rush line, which also utilizes special fabric to enhance performance and endurance.
In the company's early days, Plank sold his merchandise from his grandmother's basement in Washington, DC. The company also a breakthrough when it made major deals with Georgia Institute of Technology and North Carolina State University.
Source: Sports Illustrated
By the early 2000s, Under Armour was soaring. The company was expanding into new merchandise and advertising on television. Sales exceeded $200 million by 2004 and Plank decided to take the company public in 2005. The company raised $157 million in the IPO.
Source: The New Yorker, Marketwatch, Biz Journals
In 2011, Under Armour partnered with Carolina Panthers quarterback Cam Newton, who became one of the company's most prized endorsers. Below are his Under Armour cleats.
Source: The New Yorker, Business Insider. CNBC
Today, Under Armour has a vast selection of women's clothing, including sports bras, leggings, and tank tops.
Under Armour bought MapMyFitness in 2013 for $150 million, followed by Endomondo for $85 million and MyFitnessPal for $475 million in 2015. The acquisitions of the fitness and health-focused apps and technology were part of the company's efforts to expand its digital offerings.
Source: The Wall Street Journal
Under Armour experienced a minor setback in 2014 when the suits it designed for the US speed skating team were blamed by some for slowing down Olympic skaters in 2014 Winter Olympics in Sochi, Russia, according to the Wall Street Journal.
Source: The Wall Street Journal
That same year, Under Armour became the second best-selling sportswear brand in the US, surpassing Adidas but still trailing behind Nike by a wide margin.
Source: Business Insider
In 2015, Under Armour had another win when it signed a deal with boxing legend Muhammad Ali.
Source: Business Insider
In 2016, Under Armour introduced the UA SpeedForm Gemini 2 Record Equipped, its first smart shoe with a built-in sensor to store and track data.
Source: Under Armour
In 2016, it was also announced the company would become the official supplier of uniforms for Major League Baseball — its first major league-wide deal.
Source: Business Insider
The next year, the company introduced its sleepwear designed to help speed up the body's recovery process. We found some merchandise in stores this year.
Source: Under Armour
It also became clear the company had missed the boat on the athleisure style trend, with Plank saying the company needed to "become more fashion."
Also in 2018, Dick's Sporting Goods' CEO called out Under Armour in an earnings call for broadening its distribution of merchandise in multiple new stores, saying the brand had a "significant weakness."
Source: Business Insider
Suddenly, Under Armour was losing appeal among its former customer base. Most shockingly, teens were abandoning the brand in huge numbers, Piper Jaffray's "Taking Stock of Teens" survey showed in April of 2018. The survey revealed that Under Armour was the No. 1 most cited "old" brand teens were no longer wearing.
Source: Business Insider
Under Armour saw some brief success in the July 2018, when its North American sales jumped for the first time in a year. But the brand still faced issues when it came to differentiating itself from competitors like Adidas and Nike, resulting in a "lack of brand clarity," according to Neil Saunders, a retail analyst and consultant.
Source: Business Insider
Despite some success, the company was still stuck with $1.3 billion worth of unsold inventory. To make matters worse, it emerged that executives and employees of Under Armour had been charging the company for visits to strip clubs with athletes or co-workers. This practice was put to an end earlier in 2018, but it didn't help the company's image.
Source: Business Insider, The Wall Street Journal
In September 2018, Under Armour announced a round of layoffs meant to help with growth and restructuring. One month later, the company beat profit expectations for its third-quarter earnings.
Source: Markets Insider, Markets Insider
Under Armour announced a turnaround plan in December to increase offerings for women and to focus more on the wants of the consumer. For a while, it seemed to be working.
Source: PR Newswire, Business Insider
It was announced in January 2019 that Under Armour backed out of its agreement with MLB to supply uniforms, saving the company a reported $50 million.
Source: Sports Pro Media
In September, Under Armour announced Stephanie Pugliese as the new North American president. Then-President and COO Patrik Frisk said that Pugliese's "demonstrated record of leadership and retail expertise significantly strengthens our ability to further amplify Under Armour as the pre-eminent athletic performance brand in our home market."
Source: Under Armour
On October 22, the company announced that Plank would be stepping down from his role as CEO after 23 years to become executive chairman and brand chief of Under Armour.
Plank was replaced by Under Armour's current COO Patrik Frisk, who joined the company in 2017 after being CEO of Aldo Group.
In a statement to the press announcing his resignation from his duties as CEO, Plank said:
"Patrik is the right person to serve as Under Armour's next CEO. As my partner during the most transformative chapter in our history, he has been exceptional in his ability to translate our brand's vision into world-class execution by focusing on our long-term strategy and re-engineering our ecosystem through a strategic, operational and cultural transformation."
Shortly after, on November 3, the company said that the US Securities and Exchange Commission and the US Department of Justice had been investigating its accounting practices since 2017. An Under Armour representative told Business Insider in a statement that the company was cooperating with the investigations and stood behind its accounting disclosures.
Source: Business Insider, The Wall Street Journal
A few weeks later, former executives told the Wall Street Journal that the company often redirected goods that were intended for factory stores to off-price chains like TJ Maxx near the end of each quarter to hit sales numbers.
Source: The Wall Street Journal
In an official company statement sent to Business Insider, Under Armour said, "As we have stated previously, we firmly believe that our disclosures and our accounting practices have been entirely appropriate."
In an email sent to employees on November 15 and obtained by Business Insider, Plank responded to the Journal's report: "Given recent events that have entered the realm of public opinion without full context, it is disappointing to have our integrity and reputation called into question."
Source: Business Insider
In May, with the coronavirus negatively impacting sales, the Maryland-based sportswear giant said it was working to extend payment terms for its athletes such as Tom Brady and Steph Curry to cut costs.
Source: CNBC
In June, the company announced it would be terminating its partnership with UCLA, once a $280 million deal signed in 2016 and meant to last 15 years. In a statement to Fox Business, the company cited not receiving marketing benefits " for an extended time period" that the company had paid for.
Source: Fox Business
On Tuesday, Under Armour said it will lay off 600 people, according to a memo from CEO Patrik Frisk obtained by Business Insider, as it struggles to overcome the effects of the pandemic.
Source: Business Insider
If you're an Under Armour employee with a story to share, email sciment@businessinsider.com.
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How To Draw A Under Armour Sign Step By Step
Source: https://www.businessinsider.com/under-armour-history-to-uncertainty-2019-8
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