Toronto Star

Under Armour is picking winners

Sports apparel company looks to take on Nike after a slew of sponsorshi­p deals boost revenue

- DREW HARWELL THE WASHINGTON POST

Six years ago, after tag-teaming an ATM, three Under Armour employees paid a golfer $8,000 (U.S.) in cash to wear the company’s clothes during Masters weekend, jumping at a chance to get the Baltimore-based sportswear upstart’s logo on TV.

Now, the company’s endorsers include not just pro football and basketball’s Most Valuable Players, but a small army of athletic megastars who have helped the underdog become one of the world’s most formidable sportswear empires.

But a new challenge has arisen: After record-setting, history-making accomplish­ments for Tom Brady, Misty Copeland, Stephen Curry and Jordan Spieth, expectatio­ns for Under Armour are higher than ever — and the competitio­n isn’t backing down.

“There’s no sense of slowdown from our perspectiv­e . . . Momentum is contagious, and it builds on momentum, and we want to be right in the middle of that,” said Adam Peake, Under Armour’s executive vice-president of global marketing.

The challenge is “prioritizi­ng the priorities, each one on their own merits . . . the ones we really go after,” he said. “It’s a good problem to have, but at the same time it presents a challenge, because we have to make the right decision for the brand.”

The $19-billion giant, which founder Kevin Plank launched from his grandmothe­r’s Washington, D.C., home to sell sweat-wicking compressio­n shirts, recently passed Adidas to become the second-best seller of sportswear in the U.S., behind only Nike.

Under Armour’s stock has gone up nearly 50 per cent over the past year amid strong endorsemen­t signings and skyrocketi­ng sales. Revenue has grown from about $17,000 in 1996 to more than $3 billion last year. But the company’s biggest gains came from its athletes, who grabbed trophies, headlines and airtime, all while flexing Under Armour’s brand.

Copeland became the first African-American ballerina to reach the highest rank of the prestigiou­s American Ballet Theatre, drawing attention to her viral ads for Under Armour and giving the company yet another victory lap.

The company has ridden its accomplish­ments all the way to the bank, most notably with Curry, the best shooter in pro basketball, who led the Golden State Warriors to the NBA championsh­ip this year. The company released its first basketball shoe this year, the Curry One line, and already all of them have sold out online, from the shiny-gold All American to the teal-and-purple Father to Son.

In April, founder Plank said Curry would push the company past its “pretty limited expectatio­ns” of a $100-million hoops business into “a $1-billion basketball brand.”

It’s a dramatical­ly risky shot to take: Under Armour’s basketball business would need to grow 30 per cent a year for the next decade to hit the capital-B billion. And Nike’s Jordan brand remains a titan, controllin­g 90 per cent of America’s basketball shoe market. Under Armour may be aiming for more than just a turf war with Nike. With its announceme­nt last week of a new line of sports bras, the company is challengin­g such “athleisure” and activewear giants as Lululemon and Victoria’s Secret.

Under Armour’s “total addressabl­e market is very big,” according to a Morgan Stanley analyst report last week, “and bigger than thought just last year.”

But Matt Powell, an industry analyst for market researcher NPD Group, said the company can’t simply rely on this year’s big wins.

“The pressure is on now: Can they keep the product flowing?” Powell said. “They’ve got to have continuall­y great product . . . There’s no place to hide here anymore.”

 ?? T.J. KIRKPATRIC­K/THE NEW YORK TIMES ?? Ryan Kuehl, left, Under Armour’s vice-president for sports marketing and sponsorshi­ps, and Leon Duncan, the company’s brand director for golf, helped land a deal with PGA star Jordan Spieth.
T.J. KIRKPATRIC­K/THE NEW YORK TIMES Ryan Kuehl, left, Under Armour’s vice-president for sports marketing and sponsorshi­ps, and Leon Duncan, the company’s brand director for golf, helped land a deal with PGA star Jordan Spieth.

Newspapers in English

Newspapers from Canada