Source: Financial Times
Anyone who reads this site understands that I’ve always had an affinity for Under Armour. The startup represented to me an opportunity to capture a share of the footwear and apparel market in an era dominated by Nike and adidas. Unfortunately, the more I began digging into the numbers around Under Armour the more I began to write these type of articles:
In 2016 in the article above I wrote these words:
UAS launched during NYFW and on 12/2/2016 they launched a pop up shop. When a brand is delivering a new product testing the market is a necessity. Just because a brand can launch something new right away, doesn’t mean that they should. In other words I get the slow roll out of UAS. I understand why they aren’t using athletes in cross promotion. This is a product they want to represent the everyday person who is now wearing athleisure from the gym to the office to happy hour. My problem is creating a new division with completely different branding is like launching a completely different company…
What I didn’t realize was when I wrote the above was that Drew L. Greer was working at Under Armour at the time when UA was working towards their UAS project. Today Greer posted a link to an interview he did over a year ago. In that interview he explains that he told UA not to pursue athleisure, a thought that I wrote over and over again on this site. I recently covered Greer on my posts about industry execs in footwear:
Project + Exec | Why Drew L. Greer Is The Most Important Analyst In The Sneaker Business
Below is a picture from the interview with Greer on Under Armour:
In this post he explains his exit from UA and then today Kevin Plank seemed to respond directly to a post Greer created on LinkedIn which garnered a large number of views and impressions. The article “11 Reasons Under Armour’s House Is On Fire” looks like the words that Plank used in explaining their transition from athleisure.
https://www.linkedin.com/pulse/11-reasons-why-under-armours-house-fire-drew-l-greer/
Greer stated that Under Armour was, “Using Cheat Codes to attempt to crack the sportwear segment,” and that the brand has, “Too many categories/business segments without the culture to match.”
Kevin Plank stated today that, “We are a performance brand. That is what we’re going to be and going to stand for, becoming the best in the world at that…— we just need to know who we are.”
The irony it seems is too close in my opinion in the timing of Plank’s announcement. Why would the brand feel the need to announce that they are narrowing their focus? Why not simply do it without bringing attention to the shift? Greer’s post has gained 54 likes from industry veterans and the comments on the post read like a narrative that it seems all of Under Armour missed by allowing Greer to walk away from the company. While Wall Street will undoubtedly knock Under Armour for shifting away from athleisure, Greer thinks that the company is making a truly authentic move back to what they are. I said recently in a post on UA’s investment day that the company’s new goal of catering to the Focused Performer is a good thing. It appears that UA is actually listening to a person they let walk away. In my opinion that shows considerable growth, and that’s a good thing.
In an interesting battle of analysts on LinkedIn Matt Powell of NPD Group is explaining that Under Armour is making a mistake by pivoting back to performance. Greer has explained what I’ve been saying and the validation is powerful. Greer states that Powell is wrong. Nike and adidas don’t build athleisure, they build footwear and apparel around innovation. The items that are now considered athleisure are simply products that were once performance. In other words the heritage of a company like adidas with their best selling Stan Smith is that the Stan Smith was once performance. Under Armour hasn’t created signature products because they aren’t old enough. What they can do is create great performance wear that is stylish and they are on the right path.
It’s an intriguing discussion that should be followed and watched closely.
Under Armour ID (Investor’s Day) 2018 Protect & Perform | Notes and Transcription