screen printed polo shirts Under Armour challenge
After a second consecutive quarter of losses, Under Armour is talking again about remaking itself from a predominantly men’s brand into a business with broad appeal across all categories of consumers. And CEO Kevin Plank has identified its women’s lines as particularly promising opportunities for growth.
But for a company that was born on the football field, introduced itself with commercials depicting a muscular sort of grit, and is still run as a kind of supersized team, the pivot Plank describes will be a challenge.
As the Baltimore based brand seeks to gain on rivals Nike and Adidas in the global market, analysts say, Under Armour must move beyond its masculine image and like other performance apparel companies run largely by male executives ensure it isn’t perpetuating the kind of jock culture that excludes the half of the population that purchases most apparel.
“The sports industry is and always has been a male dominated industry,’ said Matt Powell, an industry analyst for The NPD Group. “Consequently, the sports industry has struggled in growing the women’s business” and is leaving “a significant amount of business on the table.”
Under Armour says 48 percent of its global workforce of more than 14,000 are women, and females account for about 25 percent of its vice presidents. The numbers of women thin out markedly near the top. Kerry Chandler, the chief human resources officer, is the lone female listed among the 11 executive officers on the company’s investor relations web page. Two of the company’s 10 directors are women.
“The industry is male dominated,” said Adrienne Lofton, Under Armour’s senior vice president for global brand management. “And that is a hangover from many, many years of sort of the old standard of what it looks like to live and work in sports.
“What we’re focused on is the company and what we can do to continue to drive numbers in a place that feels more balanced and reflects the consumers that we serve.”
It’s not just the sports industry in which men hold most of the highest positions. Women remain scarce in the executive ranks and on the boards of most companies. There are fewer than 30 female CEOs in the Fortune 500.
Analysts say more representation of women in leadership helps companies sell more products to women, who are responsible for the majority of spending on apparel for themselves, and for the boys and men in their lives. “The more diverse, the better, especially when serving a diverse population.”
While Under Armour began in football, it has expanded far beyond the gridiron, making products for all major sports, and activities as diverse as running, hunting, working out and going to the mall. The company has invested hundreds of millions of dollars buying fitness and health tracking apps.
Under Armour’s recent campaigns for women include a pitch featuring stylized videos set to poetry showcasing the toughness and athleticism of ballerina Misty Copeland and other female athletes.
“We have an incredibly talented team that is focused on her, what she needs and how we can outfit her 24/7,” said Chandler, the human resources executive.
Under Armour has long sought inroads in the women’s space. national soccer team in 2005, and signed champion skier Lindsey Vonn to an endorsement deal the following year.
Under Armour reached $1 billion in women’s sales in 2016 out of $4.8 billion total revenues. But while the company called the $1 billion figure a “milestone,” the share has stayed mostly in the 20 to 30 percent range for years, even as the company has grown.
“We see an incredible amount of runway for this business,” Plank said during an April earnings call. “But there is work to be done.”
Altering consumers’ initial impressions of a brand can be a challenge. After Under Armour burst onto the market 21 years ago, the company’s early ads featured sculpted, grunting men lifting weights in barren gyms, and a coach bellowing at players in a low growl.
The design of Under Armour’s stores, and even its name, “are very masculine,” said Neil Saunders, an analyst with the research firm GlobalData Retail.
“It’s certainly made some inroads with women and to diversify,” he said. But “it’s still viewed by most people as a very masculine brand. They have integrated some very successful women [as endorsers], but it’s still a very male dominated lineup.”
The company’s celebrity athletes include Olympic swimming icon Michael Phelps, golfing champion Jordan Spieth and NBA star Stephen Curry. Under Armour retains a significant presence in football and has even signed deals to outfit college football officials from the major conferences on game days. One of the company’s most prominent endorsers New England Patriots quarterback Tom Brady is a football player, and Plank’s management style borrows heavily from his days as a special teams player and running back at the University of Maryland.
Under Armour began as the answer to a football problem. Plank found that the T shirt he wore under his gear would quickly become drenched with sweat. He created the moisture wicking synthetic undergarment that became the company’s signature product.
While many CEOs use the language and imagery of sports to convey a sense of working as a unit, Plank, 44, has integrated the ethos of football and team sports generally into the company’s culture to an unusual degree.
At Under Armour, everyone is a “teammate,” interns are “rookies” and orientation is “preseason training.” Just as some college coaches won’t utter the name of their chief rival, the uber competitive Plank rarely says “Nike” in public. The name of Under Armour’s vast new office space in Port Covington “Building 37” is a nod to Plank’s college jersey number.
Under Armour did not make Plank available for an interview for this story. He answered questions in an email last month.
“Operating as a team was the same foundation I used to start our company,” Plank wrote. “Sales and marketing were like offense, manufacturing and distribution were like defense, finance and IT were like special teams,” he wrote.
Plank writes messages to the staff on an erasable board in his office of the sort that many coaches use: “OVER PROMISE AND DELIVER,” “DICTATE THE TEMPO,” and at the center, in red “DON’T FORGET TO SELL SHIRTS AND SHOES.”
David Bradford, who teaches at Stanford’s Graduate School of Business, said the style has benefits and potential costs.
With his football team analogies, Bradford said, Plank “is being inspirational, so he’s moving people away from the mundane tasks to showing how those tasks really fit within a larger vision.