Shoshy Ciment/Business Insider
- Under Armour, still a leading athletic-wear seller, has fallen into a bit of a rut.
- Shares of the company fell 15% following the announcement of second-quarter earnings on Tuesday where the company missed revenue forecasts and announced it expects sales to decline in North America throughout 2019.
- Under Armour has had massive problems in the past, including $1.3 billion in unsold merchandise in 2018, shrinking popularity among teens, and a scandal involving executives going to strip clubs as a company expense.
- The company announced a turnaround plan in 2018 that didn’t lead to immediate growth — but in May of 2019, a 4% jump in shares after higher-than-expected first-quarter earnings seemed like a glimmer of hope for a company seeking stable ground.
- 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.
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Under Armour is in trouble.
While similar sports retailers like Nike and Adidas are posting positive sales growth numbers relatively consistently in past years, Under Armour has sputtered. And recently, things have taken another turn for the worse.
A drop in the company’s second-quarter sales in North America announced on Tuesday sent shares down 15%. The company also said it now expects a revenue decline in North America for the whole year.
This isn’t Under Armour’s first rough patch. The company has experienced many ups and downs in its over 20-year history. In 2018, the level of the company’s unsold inventory grew 11% to $1.3 billion in the second quarter.
That same year, Under Armour executives were embroiled in a scandal that involved going to strip club on the company’s dime, a practice that was officially banned in February of 2018, The Wall Street Journal reported.
Under Armour announced a turnaround plan to revive the brand in December of 2018 — the plan included using data to drive consumer engagement and growing its women’s offerings.
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 and its eventual slow decline, here is the complete story of Under Armour so far.
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.
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.
Shoshy Ciment/Business Insider
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