BLOW­ING PEO­PLE’S MINDS IS ONE OF MY FA­VORITE THINGS TO DO”

UN­DER AR­MOUR MAKES I TS AP­PAREL WITH 250,000 OVER­SEAS WORK­ERS. CAN IT BRING JOBS BACK HOME TO BALTIMORE? BY RACHEL MON­ROE

Bloomberg Businessweek (Asia) - - CONTENTS -

In March, Un­der Ar­mour won a mi­nor skir­mish in the war for sportswear dom­i­nance when it be­came the first to sell a per­for­mance shoe with a 3D-printed mid­sole. The shoe, the UA Ar­chitech, sold out on­line in 19 min­utes. Sure, there were only 96 pairs avail­able, but, as Chief Ex­ec­u­tive Of­fi­cer Kevin Plank says one re­cent af­ter­noon, “Ev­ery­one was try­ing to do it. No one thought that we’d get there first.” Plank is sport­ing a pair of the $300 Ar­chitechs as he tours the Light­house, the new home of Un­der Ar­mour’s in­no­va­tion di­vi­sion in an in­dus­trial tract off the Mid­dle Branch of Baltimore’s Pat­ap­sco River. (It opened on June 28.) Plank’s at­ti­tude seems to ex­ist on a nar­row spec­trum be­tween pumped and su­per­pumped, but the shoes are par­tic­u­larly en­thu­si­asm-in­duc­ing. “They’re like two clouds of awe­some­ness I’m walk­ing on right now,” he says. “I stole that from my 9-yearold, ac­tu­ally. My kids have been watch­ing a lot of My Lit­tle Pony, and it’s rub­bing off on me.”

The shoes’ most no­table fea­ture is a lip­stick-red mid­sole that re­sem­bles a whale­bone corset. It’s some­thing you squint at and won­der: How ex­actly did they make that? The short an­swer in­volves poly­mers and a part­ner­ship with DuPont. The long an­swer in­cludes Plank’s plans to rein­vent his com­pany’s sup­ply chain, trans­form the city of Baltimore, and maybe even out­ma­neu­ver Nike in the process.

It’s dif­fi­cult to talk about ath­let­ics com­pa­nies with­out re­sort­ing to sports metaphors. In Un­der Ar­mour’s case, they’re par­tic­u­larly hard to re­sist, in part be­cause sporti­ness is so es­sen­tial to its cor­po­rate culture. Em­ploy­ees call one an­other “team­mates”; 70 per­cent of them played high school sports. The cur­rent head­quar­ters, in south Baltimore’s Lo­cust Point neigh­bor­hood, in­cludes a 35,000-square-foot gym and a basketball court that used to be open 24/7, un­til all the drib­bling dur­ing work hours proved too dis­tract­ing. The walls are cov­ered with photos of Stephen Curry and Misty Copeland so large that their beads of sweat are sev­eral inches wide. Plank, a high-en­ergy 43-year-old with gen­tly gray­ing hair, is fond of in­spi­ra­tional analo­gies in­volv­ing fires and races and win­ning. His team­mates speak of him in the rev­er­ent tones usu­ally re­served for coaches.

The phrase “ag­gres­sive, young, fearless” is plas­tered all over the walls. It’s a quote from golfer Jor­dan Spi­eth de­scrib­ing him­self and the brand, but it could just as eas­ily ap­ply to Plank, who pro­pelled him­self from walk-on to spe­cial­teams cap­tain of the Univer­sity of Mary­land foot­ball pro­gram. Dur­ing his se­nior year, in 1995, the mid-Atlantic was seized by a record-set­ting heat wave, and prac­tic­ing in a sweat­soaked cot­ton T-shirt felt more op­pres­sive than usual. The year af­ter he grad­u­ated, Plank de­vel­oped a mois­ture-wick­ing shirt made from syn­thetic fab­ric and be­gan call­ing up for­mer team­mates. In Un­der Ar­mour’s first year, when the com­pany was still op­er­at­ing out of his grand­mother’s base­ment in the Ge­orge­town neigh­bor­hood of Wash­ing­ton, Plank put more than 100,000 miles on his Ford Ex­plorer driv­ing up and down the East Coast and try­ing to par­lay those friend­ships with for­mer team­mates into or­ders. “I grad­u­ated from col­lege and re­al­ized, I know 60 peo­ple play­ing in the NFL who have ca­reers that are go­ing to be some­where be­tween three and five years,” Plank says. “So the win­dow is about this big. And I ei­ther take ad­van­tage of it now or lose it for­ever. I’m think­ing, Is there a way for me to give them a gift that would also help me? And it’s that vir­tu­ous cy­cle that re­ally got us go­ing.” It worked bet­ter than he ex­pected. A com­bi­na­tion of in­no­va­tive tech­nol­ogy and Plank’s fer­vor for his own prod­uct con­trib­uted to Un­der Ar­mour’s ver­ti­cal rise, from $17,000 in sales that first year, to $400 mil­lion in 2006, to a pro­jec­tion of al­most $5 bil­lion in 2016.

An un­der­dog ethic is still baked into com­pany lore, even though last year Un­der Ar­mour over­took Adi­das to be­come the sec­ond-big­gest sportswear brand in the U.S. In May, the com­pany signed the largest spon­sor­ship deal in the his­tory of col­lege sports, pay­ing $280 mil­lion for a 15-year con­tract with UCLA. Un­der Ar­mour has in­vested more than $700 mil­lion in fit­ness apps and ac­tiv­ity-track­ing tech­nol­ogy, and it hired the de­signer Tim Cop­pens, a fash­ion-for­ward Bel­gian, to help snag a por­tion of the lu­cra­tive “ath­leisure” mar­ket.

These days, Un­der Ar­mour looks like an un­der­dog only when held up against Nike, a ri­val that Plank and other ex­ec­u­tives refuse to even name. “Five years ago, our largest com­peti­tor was 12 times our size,” Plank says. “Then it was 11 times, then 10 times. To­day, they’re roughly six times our size. But the fact is, they’re still six times our size. So we have a lot of work to do.” He clearly rel­ishes the idea of the world’s big­gest sportswear com­pany feel­ing Un­der Ar­mour breath­ing down its neck. This spring’s NBA fi­nals were the most re­cent proxy bat­tle, be­tween Nike’s Le­Bron James and Un­der Ar­mour’s Curry, the MVP hero to un­der­dogs ev­ery­where. Curry de­fected from Nike to Un­der Ar­mour in 2013. It hap­pened af­ter Nike of­fi­cials mis­pro­nounced Stephen (as “Steh-fawn”—twice!) dur­ing a re­cy­cled Pow­erPoint pre­sen­ta­tion that ac­ci­den­tally in­cluded Kevin Du­rant’s name in­stead of his own, ac­cord­ing to ESPN. James won the re­cent cham­pi­onship, but sales of Curry-branded shoes out­pace those of ev­ery other cur­rent NBA player. Un­der Ar­mour’s rev­enue in the

cat­e­gory is up 350 per­cent from last year—a po­ten­tial “tip­ping point,” one Mor­gan Stan­ley an­a­lyst wrote, “sig­nal­ing the end of Nike’s basketball dom­i­nance.”

Plank’s ap­pre­ci­a­tion for the over­looked and un­der­es­ti­mated—he’s the youngest of five brothers—is man­i­fest in his af­fec­tion for Baltimore. On the sur­face, there may not seem to be much link­ing the edgy, gritty city of John Waters and The Wire with Un­der Ar­mour’s per­for­mance-bro aes­thetic. But Plank sees an affin­ity be­tween Baltimore’s hard­work­ing, blue-col­lar past and his com­pany’s re­lent­less striv­ing to be the best sportswear com­pany out there. When pressed fur­ther, he just shrugs and quotes Drake: “‘All I care about is money and the city that I’m from.’ Maybe that’s hu­man na­ture—not the money part, but the de­sire to see the place where you live suc­ceed.”

Al­though Plank isn’t tech­ni­cally from Baltimore proper—he grew up in a mid­dle-class fam­ily in Kens­ing­ton, Md., a com­muter sub­urb of D.C.—he has adopted the city as his own. Un­der Ar­mour moved there in 1998, and his per­sonal in­vest­ments have one cri­te­rion: They have to ben­e­fit the com­pany, Baltimore, or prefer­ably both. He’s in­vested mil­lions in sup­port­ing Mary­land tra­di­tions such as horse rac­ing and rye whiskey. In 2007 he pur­chased a 530-acre horse farm once owned by the Van­der­bilt fam­ily. “Blow­ing peo­ple’s minds is one of my fa­vorite things to do,” he says. “I bought the farm—lit­er­ally—be­cause horse rac­ing is an or­ganic part of the culture of Baltimore and be­cause I wanted to bring peo­ple here and show them a Baltimore that blows their mind. Peo­ple like Tom Brady and Colin Powell come up for the week­end and are like, ‘I had a dif­fer­ent im­age of what Baltimore would be.’ And it’s only 17 miles north of the city.”

By 2013, Un­der Ar­mour was grow­ing at such a fast clip that it was clear the com­pany needed to ex­pand its foot­print in Baltimore. There was never re­ally any ques­tion of leav­ing the city or of re­lo­cat­ing to the sub­urbs, Plank says. In­stead, he set his sights on a seven-acre par­cel ad­ja­cent to the cur­rent head­quar­ters. But af­ter pro­tracted wran­gling with the city, Un­der Ar­mour was turned down. When he got the news, Plank was in Dubai drink­ing whiskey with his chief of staff, who saw a sil­ver lin­ing.

“That land you were look­ing at?” the chief of staff said. “It felt … tight.”

“I just looked up at the sky­line of Dubai, and all I could think to my­self was that 15 years ago, that sky­line didn’t ex­ist,” Plank says. “Un­til some­one with a vi­sion, Sheikh Mo­hammed, said, ‘I’m go­ing to take this old fish­ing town and turn it into the eco­nomic cap­i­tal of the Mid­dle East.’ Out of desert and a fish­ing town. That’s vi­sion. And I’m look­ing out at it and think­ing, Well, what could we do?”

By then, Plank owned a five-acre par­cel in an in­dus­trial part of Baltimore, where he planned to build a whiskey distillery. The land was in a for­mer brown­field site known as Port Cov­ing­ton. That the area was largely un­in­hab­ited was part of its ap­peal, he says. “We wouldn’t be kick­ing out lit­tle old ladies with 30 cats.” Over the next few years, he spent more than $100 mil­lion of his own money buy­ing up nearby real es­tate, ul­ti­mately ac­quir­ing 266 acres un­der the um­brella of his real es­tate in­vest­ment arm, Sag­amore Devel­op­ment.

Clock­wise from left: Plank (cen­ter) at the Light­house; the UA Ar­chitech; Un­der Ar­mour ap­parel un­der wraps

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