Commentary

Under Armour Looking To Put Unforced Errors Behind It

Forget about winning or losing, Under Armour seems to be struggling to figure out how to play the games.

“A love-hate triangle has ensnared Under Armour,” Miriam Gottfried writes in the Wall Street Journal this morning. “The dynamic among the three companies shows how brands and retail chains are tripping over each other as they struggle to survive fierce competition.”

Gottfrieb traces the fallout resulting from Under Armour’s decision in 2016 to sell a cheaper line of sportswear at Kohl’s, which has resulted in weaker sales at its traditional sporting goods outlets such as Dick’s.

“A year later, it is clear that price-savvy shoppers, happy to get the Under Armour label for less, have left the deal in tatters. Kohl’s has touted Under Armour as a bright spot. But Dick’s, last year Under Armour’s biggest customer, isn’t happy. Now both Dick’s and Under Armour have lowered growth expectations …,” Gottfried reports.

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On another front, Under Armour founder, chairman and CEO Kevin Plank’s resignation from President Trump’s Manufacturing Jobs Initiative Monday — before the President disbanded it as it was in the process of disbanding itself Wednesday — drew fire from some of the president’s supporters, as Hayley Peterson reported for Business Insider.

“I love our country & company. I am stepping down from the council to focus on inspiring & uniting through power of sport,” Plank tweeted above a fuller statement. While he did not specifically refer to Trump, and specifically to his widely denounced remarks about the violence in Charlottesville, reaction from the right was immediate on Facebook. 

“Bailing on Trump?? Done with you and your spineless CEO!!! BURNING EVERYTHING IN MY HOUSE THAT IS UA,” reads one Facebook reaction to that decision. “Your mistake is thinking liberals can afford your overpriced clothing line …,” reads another. Others simply call for a boycott.

In February, comments Plank made about Trump being “a pro-business president” and “a real asset for this country” were met with a “social media backlash” that the company addressed in an open letter published in the hometown Baltimore Sun

“We engage in policy, not politics,” it said. “We believe in advocating for fair trade, an inclusive immigration policy that welcomes the best and the brightest and those seeking opportunity in the great tradition of our country, and tax reform that drives hiring to help create new jobs globally, across America and in Baltimore.”

In late June, Patrik Frisk joined Under Armour as president and COO, as Marketing Daily’s Sarah Mahoney reported, and shook up its organizational structure with CMO Andy Donkin and other key executives reporting to him. Earlier this month, it announced a restructuring plan following a second consecutive quarterly loss. It includes “laying off 2% of its 15,000 employees worldwide, or about 280 people,” Matt Bonesteel reported for the Washington Post.

And, to be sure, Under Armour has fans in the Wall Street stands. In an analysis originally published on SumZero that was picked up by Barron’s, Saga Partners’ Joseph Frankenfield writes that it “is a business we have no plans to ever sell.”

Whatever headwinds it has been facing, “the long-term growth story is intact. It won’t be a 20-fold investment in six years like Netflix, but it can certainly double over the next four years when industry conditions improve, margins expand, and momentum shifts,” Frankenfield posits.

Sounds good. Nothing generates ratings and sells papers like a good comeback story.

 
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