As the fashion athletic market continues to pick up the pace, Under Armour remains unrelenting in its emphasis on a performance-first approach, even if strategy has put much of Wall Street on the fence about the company.
When Under Armour founder Kevin Plank took the stage on Tuesday at NRF 2020: Retail’s Big Show in New York, he reiterated the brand’s stance that its performance direction is backed by a solid long-term strategy. What’s more, the former CEO detailed the lengths that the Baltimore-based firm had taken to bring to life its new company vision.
“Listening is the most important thing we can do,” Plank explained during an onstage interview with Deloitte vice chairman Rod Sides, peppering his speech with sports metaphors. “We’ve talked about the engine room for the last couple years, really getting to understand our business and our consumer.”
Over the past few years, Under Armour had been working to define its target audience, speaking with tens of thousands of consumers in four of its key markets: Germany, the United Kingdom, China and the United States. The findings led the brand to identify a core group on which to target its efforts: The “focus performer,” a demographic that’s young, diverse, active, self-motivated and ready to spend.
During its investor day in December 2018, the company said that the market represented a $92 billion opportunity globally and a $29 billion market in the U.S. and Canada.
“With that, we’re now creating this platform for what the Under Armour brand is, which is to be the human performance company,” Plank added on Tuesday.
However, analysts have cautioned that Under Armour’s performance focus could put it at a serious disadvantage amid the current athleisure and fashion sportswear boom. According to an October report by The NPD Group, the leisure segment, which includes the popular sport-lifestyle group, showed solid improvement with footwear sales, rising 7% to $3.9 billion. The performance segment, on the other hand, fell 4% to $2 billion, with running, basketball and training shoes logging negative sales results.
“We’re not saying, ‘We want to be performance and we don’t want to be fashion.’ We don’t see a difference between the two things,” Plank reiterated on Tuesday. “We believe that without beauty, there is no performance. And hopefully people will see without performance, there’s no beauty.”
What’s more, Under Armour has seen success in its Hovr franchise — it continues to highlight the Hovr Infinite sneaker as a top seller — as well as its brand partnerships with NBA star Stephen Curry and professional wrestler turned actor Dwayne “The Rock” Johnson.
And as it kicked off the New Year with new leadership as former COO Patrik Frisk assumed the role of CEO, Plank announced at NRF 2020 the launch of “The Only Way Is Through” campaign, featuring three-time NBA champion Stephen Curry, two-time World Cup winner Kelley O’Hara and six-time Super Bowl winner Tom Brady, among other athletes.
“The world does not need another capable apparel or footwear manufacturer,” Plank added. “They need a dream, a hope — and that’s the positioning.”
Steph Curry, Tom Brady, Kelly O’Hara + More Star in Under Armour’s New Campaign
Under Armour Stock in Flux After Analysts Signal Concerns Over North America Business
Why Under Armour’s Plummeting Sneaker Sales Are Worrisome