Kevin Plank, who spent the last two decades building Under Armour into an athletic powerhouse, is stepping down as CEO at a time when the company continues to grapple with concerns about its growth strategy and culture.
Plank will exit the CEO role in January and remain at the company as executive chairman and brand chief. He is being replaced by president and COO Patrik Frisk.
“Our multiyear, transition approach has ensured purposeful leadership continuity,” Plank said in a statement. “Patrik is the right person to serve as Under Armour’s next CEO.”
Plank added, “As my partner during the most transformative chapter in our history, he has been exceptional in his ability to translate our brand’s vision into world-class execution by focusing on our long-term strategy and re-engineering our ecosystem through a strategic, operational and cultural transformation.”
Frisk joined Under Armour in July 2017 after working as CEO of Aldo Group under its legendary founder, Aldo Bensadoun. The exec has nearly three decades of experience in the apparel, footwear and retail industry, previously serving 10-plus years with VF Corp. in a variety of leadership roles.
Explaining his decision to hire Frisk, Plank told FN in a January interview, “I thought about a few different things: What’s the new world? What’s the new economy? What direction are we going in? The most important thing with bringing on a partner was to ensure that it was someone I can trust and that we can build the world’s most efficient shirts and shoes business.”
As part of his role as COO at Under Armour, Frisk has been tasked with putting plans in place to turn around the stagnant North American business and returning the organization to its performance-driven roots.
In a statement, Frisk said, “I joined Under Armour to be part of an iconic brand that demonstrated the power of sport and premium experience, when properly harnessed, is capable of unlimited possibilities. Today, I am even more resolute in this conviction. The opportunity that lies ahead of us is incredible. As our entire global team continues to lean hard into our transformation, I am honored to lead this great brand toward the realization of its full potential.”
As CEO starting Jan. 1, Frisk will report to Plank, who will continue to lead Under Armour’s board while focusing on elevating products, amplifying the brand’s story and overseeing the company culture.
“One of the great things we’ve been able to achieve over the last year and half is a much more deliberate company rhythm,” Frisk said in an exclusive interview with FN in January. “We have a much stronger planning model for the company that gives us a much higher ability to predict the business and to lead the business together.”
As president and CEO of Under Armour’s vendor partner Foot Locker, Dick Johnson called the timing of the announcement a “surprise” but added that “[Kevin] and Patrik have developed a great relationship, and I think this was the plan when Patrik joined them.”
“He’s a very thoughtful leader — very passionate about product and culture,” Johnson added in describing Frisk. “I think those are the things he’ll be able to drive home with the Under Armour team… They’ve laid out their strategy and where they’re taking the company, and Patrik will certainly be on the forefront of executing against that.”
In 1996, Plank founded Under Armour while he was still a college student in his grandmother’s basement. It took the company only 10 years to break ground in the footwear space and under 15 years to surpass $1 billion in annual sales.
“The company has never been in better shape operationally than they are today, and Patrik is to be given credit for much of that change,” said Matt Powell, senior industry advisor of sports at The NPD Group.
However, Powell cited the ongoing challenges in the Baltimore-based sportswear firm’s home market, which noted a 3% decrease in second-quarter sales to $816 million as it struggles to keep up with competitors Nike and Adidas as well as retro labels like Champion and Fila.
“We very clearly are in an athleisure cycle now, and consumers are telling us they don’t want to buy high-performance gym wear,” he said. “They want products that are usable in multiple occasions, and I think they’ve got to try to move away from gym wear to sportswear — that’s going to be the key to turning the U.S. business around.”
According to B. Riley FBR equity research analyst Susan Anderson, Frisk’s immediate moves as chief must center on five tasks: reinvigorating its merchandise; improving segmentation across channels; elevating the higher-end product; returning that product to quality; and heightening its focus on leisure wear.
“The product has been taken too much downstream,” Anderson said. “Also, there hasn’t been as big a focus on leisure [or] streetwear as other brands, given that is where the trends are right now.”
Ahead of market open, Under Armour’s stock was up 2.24% to $20.54.
Editor’s note: FN has updated the story to reflect the comments of industry experts.
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