Analysts Say Nike, Under Armour Designer Swap Is ‘Par For The Course’

Under Armour Curry Two Northern Lights
The Under Armour Curry Two "Northern Lights."
Courtesy of Under Armour

It was the designer switcheroo heard around the world. Well, sort of.

News that Dave Dombrow, the mastermind behind some of Under Armour Inc.’s most popular shoes, was leaving the brand for Nike Inc. may have set the internet ablaze Monday, but analysts say the swap is little more than typical shoe-business behavior.

In fact, Canaccord Genuity Inc. analyst Camilo Lyon referred to move as “par for the course.”

We view this departure as a standard industry practice and one that should not have a material impact on Under Armour’s fast-growing footwear business (up 57 percent in 2015),” Lyon said in a note today. “To keep things in perspective, Under Armour’s footwear team was comprised of roughly 20 people when Dombrow joined the company from Puma and now has a deep talent pool of more than 200 people and growing rapidly.”

Dombrow, who actually worked with Nike as a designer from 2000 to 2003, was Under Armour’s SVP of design. Due to a non-compete clause, the designer isn’t expected to officially start with Nike until 2017.

As Under Armour has increased in size, so has its bench of qualified designers. On top of which, there are some Nike people waiting for their non-competes to end to join the Under Armour team,” Sterne Agee CRT analyst Sam Poser wrote in a note Monday. “This is the continuation of a lot of thievery among the bigger players. Adidas poached three top designers from Nike 18 months ago. We do not expect the poaching to end anytime soon as the battle for footwear supremacy continues.”

Matt Powell, a sports-industry analyst with The NPD Group, also called the swap “very typical,” but noted that Dombrow was an important component to Under Armour’s design team.

Dombrow is a real talent, and he has done some amazing work at Under Armour,” Powell said. “But this is a team business. Under Armour’s team is very solid, and [the company] should be fine.”

Powell added that Nike should also benefit from the addition of Dombrow but cautioned that potential benefits and losses should not be overblown.

Similarly, Lyon offered up a laundry list of shoe-industry designer-and-executive swaps in recent years as examples of the commonplace practice, including the Nike-Adidas poaching referenced by Poser.

Within a year after opening a design studio in Portland in 2013, Under Armour hired at least 16 employees from its key competitors in the region,” Lyon also added. “The bottom line is we believe this is part of the business and companies like Nike and Under Armour anticipate these changes and thus adequately prepare to navigate through them.”