It’s hard to believe that Under Armour was established in 1996 given the way it competes with industry giants Nike and Adidas.
A retail powerhouse in the athletics space, Under Armour is renowned around the globe due to its premium-quality products – apparel, footwear, accessories, and equipment – backed by great branding, celebrity endorsements, and tactful product placements.
Here are a few statistics from 2020 highlighting Under Armour’s leading position:
- Net Revenue of $4.5 billion
- Gross Profit of $2.1 billion
- Share Price of $14.9
- Total Assets of $5.03 billion
- Around 15,000 employees worldwide
- 100+ countries where Under Armour products are sold
- Operates in four geographic areas: North America, Latin America, Europe, the Middle East and Africa ("EMEA"), and Asia-Pacific
With a clear-cut purpose of ‘Empower Those Who Strive For More” Under Armour strives to enhance the performance of athletes at all levels from all walks of life as well as people with active lifestyles.
Let’s now take a detailed look at the growth journey of Under Armour…
Under Armour: The Poster Child For Next-Gen Performance Apparel
It was 1995, and Kevin Plank had an idea while playing as a fullback at the University of Maryland Football team.
Kevin had had enough of changing his sweat-soaked cotton t-shirts worn over his jersey during his two-day practice. The problem wasn't just the sweat and the continuous changing of shirts, but the fact that the shirts drenched in sweat made him hot and heavy, impacting his performance negatively.
At the same time, he was fascinated with the way his compression shorts stayed dry and wondered if there was a particular type of fabric that could be used to make lightweight shirts. This made him realize that there is an unexplored opportunity to find a better alternative to cotton t-shirts.
From Idea To Inception
After graduating, Kevin began working on the prototypes of shirts in 1996. He tried and tested and eventually designed a shirt made of synthetic fabric that would wick away moisture and fit athletes perfectly. Named "The Shorty," prototype #0037 started it all.
Not only was it soft, stretchy, and skin-tight, but it also wicked away sweat faster than anything else out there, keeping athletes light, dry, and cool. No wonder that when he gave the prototypes to his teammates at Maryland and friends who went on to play in the NFL, he received glowing feedback with both male and female players from different sports showcasing their interest. He further perfected the design and officially launched the "HeatGear" - a synthetic base layer made to wick away sweat.
With this, Kevin Plank founded Under Armour on September 25, 1996, by using all his savings and even racking up a credit card debt of $40,000. He began working from his grandmother's basement in Washington D.C. All this while, he also spent his time traveling with the apparel in the trunk of the car, exploring opportunities to expand and make sales. By the end of 1996, he had managed to make his first big sale of apparel to the Georgia Tech team, earning $17000. Under Armour was well and truly on its way to making a dent in the Nike and Adidas ruled athletic apparels industry.
Why The Name Under Armour?
The widely recognized Under Armour name was the result of a mistake. Yes, that's right. Initially, Kevin wanted to name the company "Heart" as he felt it would be a good representation of wearing your heart on your sleeve. But, luckily, it didn't go through the patent and trademark process. Next, he came up with Body Armor and had almost finalized the name, but it too was already taken. Just around then, one of his acquaintances asked him: "How that company you are working on…. Ummm, Under Armor?" This made a light bulb go on Kevin's head as he instantly liked the name and thought it was ideal. Hence, he went ahead with it. The simplistic yet highly effective and aesthetic logo came straight out of the company name, combing the U in Under With A in Armour. Safe to say, it too was a hit.
Success Comes Calling
Having delivered on the keep-you-cool promise with HeatGear, Under Armour went a step further by introducing ColdGear in 1997 designed to keep athletes warm, dry, and light in cold conditions. The AllSeasonGear soon followed, offering athletes a comfy and high-performance t-shirt for all seasons.
The word about Under Armour's revolutionary t-shirts spread, and a number of teams from the NFL gladly became the company's esteemed customers. The year 1997 ended with $100,000 in sales, and it became crystal-clear that Under Armour had arrived as both Nike and Adidas took notice and began launching similar products.
As 1998 arrived, Kevin knew the company had outgrown Grandma's basement, and it was about time to move. Hence, he set up the company's headquarters and warehouse in Baltimore, MD.
The Big Break
Under Armour was already doing fairly well by any stretch of imagination. But then came the big break in 1999 as Warner Brothers signed the company to outfit two of its films – Oliver Stone's Any Given Sunday (a 1999 sports drama film) featuring Al Pacino and Jamie Fox, and The Replacements (a 2000 sports comedy) starring Keanu Reeves, Gene Hackman, and Orlando Jones among others. In the former, the football team wore Under Armour apparel and accessories, making it a hit with athletes everywhere. To further capitalize on this unique opportunity and make the most of the brand awareness and visibility, the Under Armour team bought a print ad in the ESPN magazine in 2000 with employees forgoing their paychecks so that the company could afford to buy the ad. This move worked even better than they had anticipated and led to an increase of $750,000 in sales.
Key Takeaway 1: Take The Leap Of Faith
If you have an idea, get it out there. Kevin did just that and built a brand from scratch that within a few years of its inception began competing with industry giants such as Nike and Adidas. Was it easy? Absolutely not. From spending his savings and racking up debt to working in his grandmother’s basement and selling apparel from the trunk of his car, Kevin did it all to make his vision a reality.
He knew there was a vacuum in the market and his product could offer high value to athletes and he backed himself. Soon his efforts paid dividends and a number of athletes, teams, and even movie production houses began contracting Under Armour. While at it, Kevin never hesitated to take bold steps such as launching a print ad on ESPN or diversifying the products portfolio.
Under Armour Making Giant Strides
With the turn of the century, Under Armour's fortune changed for the better as the company elevated itself to the next level.
New Products. New Signings. Same Old Effective Marketing Tactics.
In 2001, Under Armour became the official supplier of the National Hockey League and signed licensing deals with USA Baseball as well as Major League Baseball in addition to XFL Football League, garnering more attention than ever.
In 2002, the company further expanded its product portfolio by launching its first-ever line of performance underwear. The Armour Underneath was stretchable, light, and breathable to help wick sweat, enable athletes to recover, and stay comfy.
2003 was a significant year for the company as Rosewood Capital, a private equity firm, invested $12 million into the company, empowering it to expand. Moreover, Under Armour premiered its first-ever television commercial – the now legendary Protect this House – that starred University of Maryland's football standout Eric ""Big E"" Ogbogu. The ad was quite successful in portraying Under Armour as the voice of the next generation, and its theme pertaining to discipline, hard work, valor helped align the brand with its customers. By 2004, sales were over $200 million, and there was no stopping Under Armour as it went back to its roots and became the official outfitter of the University of Maryland – the place where the idea of the company was born and shaped just 8 years ago.
Here Comes The IPO
Under Armour went public in November 2005 by listing on Nasdaq, raising $153 million and becoming the first U.S. based IPO in almost five years to double on the very first day of trading. The capital enabled the company to diversify its portfolio and expand quickly.
The very next year, Under Armour began offering footwear, and it let the world know that it's launching its first line of football cleats with its "Click-Clack" advertisement, which resonated with the football players worldwide. It was an instant success as within one year, Under Armour captured 23 percent share of the market and became the official footwear supplier to the NFL. Late next year, in 2007, Under Armour opened its first brand house retail store in Westfield Annapolis mall in Annapolis, Maryland.
In 2008, Under Armour launched its highly anticipated performance trainers announcing it through its first Super Bowl Commercial, marking its entry into the athletic footwear industry. In 2009, Under Armour went a step ahead and launched its performance footwear line, striding into the running category. Moreover, the same year, Cal Ripken Jr – a baseball Hall of Famer – established an alliance that paved the way for Under Armour to have a significant presence at various events, including Cal Ripken World Series and minor league Aberdeen IronBirds. Under Armour also reportedly sponsored the reality T.V. show Duck Dynasty and went out of its way to show support to a controversial cast member, Phil Robertson.
Reaching The $1 Billion Milestone
Meanwhile, the company went on its merry way to open new stores and factory outlets in 39 states within the U.S. and also doubled down in expanding to Canada and China. Other than Baltimore, Under Armour also established offices in renowned cities around the globe, right from London in the U.K. and Amsterdam in the Netherlands to Shanghai in China and Paris in France, among many others.
The company signed Tom Brady, arguably one of the greatest athletes in the world, in 2010. It proved to be critical for the company's continuous success in the years to follow.
By 2010, Under Armour was a name that needed no introduction. The company had quadrupled its revenue in just five years and surpassed $1 billion in sales – not too bad for a company that was just launched 14 years ago in a basement.
Key Takeaway 2: Create Your Own Pathway
Under Armour quickly figured out what works for it and what doesn’t. Once it did that, the company stuck to its guns – launching new innovative products focused on enhancing performance, expanding its network of stores and footprint within the U.S. and abroad, and leveraging the power of marketing and advertising to get through to its customers.
These simple strategies delivered results and helped Under Armour reach the monumental $1 billion mark within five years of launching, becoming a force to be reckoned with in the athletic-apparel industry.
From 2011 Onwards To Today
In 2011, Under Armour, thanks to its innovation as well as Research and Development (R&D), developed Charged Cotton – a fabric that was very much like cotton in terms of softness and comfort it provided but dried way faster than cotton. The company also collaborated with Zephyr Technology to develop E39, a health sensor-laden shirt that was also used in the NFL combine.
The next year, Under Armour launched the ultimate sports bra. Having talked to hundreds of athletes and tested thousands of prototypes, Under Armour developed the perfect product for women. The high attention to detail and commitment to enhance the performance of athletes was laid bare with the company’s innovative approach of constructing each cup size to offer unparalleled support and comfort.
Continuing to innovate and offer even better-quality products, Under Armour launched ColdGear Infrared in 2013. It featured the best insulation system – a soft thermo-conductive lining that absorbed and retained body heat, allowing athletes to stay warmer without any additional weight.
Becoming A Tech Company
In the same year, Under Armour made the landmark acquisition of MapMyFitness for $150 million, stepping up its digital health game to create the ultimate digital community for all athletes. In its quest to craft an elevated training experience for athletes and help them improve, Under Armour understood the importance of embracing software, harnessing the power of digital, and acquiring data. Although slightly late to the fitness tracking space, by 2013, Under Armour was a company on a mission to digitize and modernize. By acquiring MapMyFitness, Under Armour aimed to become the best digital training experience provider and mobile fitness platform, encouraging people to lead healthier lifestyles.
In 2014, Under Armour also launched Speedform Appolo, a running shoe tailored to offer speed and comfort. With the tagline “This is what fast feels like,” Under Armour announced that it was well and truly a footwear brand eager to offer the best to its customers. By signing the super-model Gisele Bundchen and Ballerina Misty Copeland in 2014, Under Armour laid bare its strategy to expand the brand to women.
The company also won the contract to become the official apparel and equipment provider to the University of Notre Dame. By 2014, Under Armour was bigger and better than ever with $3 billion in annual sales, surpassing Adidas to become the best-selling sports apparel brand in the U.S.
The very next year, Under Armour acquired MyFitnessPal, the calorie and nutrition counting app maker, for $475 billion in order to expand its digital platform into online fitness communities and, Endomondo, the free GPS-based tracking app maker for $85 million, augmenting its digital offerings.
With the three acquisitions of MapMyRun, MyFitnessPal, and Endomondo, Under Armour creates the world’s largest digital fitness and health community. Having already revolutionized the way athletes dress, Under Armour was now changing the way they live. The idea behind the acquisitions was to build a social community and encourage physical activity. Given that the community would be exposed to the Under Armour brand, it would help drive sales for athletic apparel, footwear, and accessories.
Under Armour also launched the UA Record app that offered everyone, everywhere, the opportunity to proactively manage their health and fitness. The app allowed the syncing of thousands of fitness tracking devices and apps onto its open platform and created a visual and user-friendly dashboard.
Partnerships Driving Growth
Having already signed NBA superstar Stephen Curry in 2013, Under Armour launched the Curry shoe line after he became a two-time NBA MVP. The Curry One shoes were an instant hit, and the sales of his shoe began driving the brand forward. From this point onwards, Curry was the face of the brand to the point that the soles of his shoes had a huge impact on the stock price. That was not all. Under Armour also signed a marketing deal with the legendary Muhammad Ali.
During the same time, Under Armour collaborated with HTC and IBM in a bid to embrace technology and data to deliver additional value to its customers. Furthermore, it partnered with American Soccer League (NASL), UCLA, and Major League Basketball (MLB).
In 2016, Under Armour launched its first-ever smart shoe, the Speedform Gemini 2, with a built-in sensor to track and store data pertaining to duration, distance, and splits, providing athletes an exceptional device-free running experience. The next year, Under Armour, signed PGA golfer Jordan Spieth, who later on launched his own golf shoe line with a shoe named Spieth One.
The following year, Athlete Recovery Sleepwear was launched, inspired by Tom Brady. It outlined the brand’s innovative capabilities and commitment to offer holistic performance-enhancing apparel. The advanced sleep system that Under Armour developed helped athletes recovered faster and led to a better quality of sleep. The soft inner fabric with bioceramic print absorbed heat and reflected infrared energy back to the skin, enabling athletes to rest and win – time and again.
Carrying on its innovation spree, Under Armour launched UA HOVR in 2018. With a revolutionary pinnacle cushioning system, the shoe not only absorbed impact but provided the additional burst of energy to keep athletes going. In the same year, Under Armour signed Joel Embiid, Philadelphia 76ers center, to a sneaker endorsement deal.
Under Armour Fallen Into A Bit Of A Rut
In late 2019, Kevin Plank announced that he would step down in 2020, and Patrik Frisk, the company’s COO, would take over as the CEO.
Amid declining sales, the Covid-19 pandemic posed further challenges to the company. However, with agility, relentless focus, and adoption, Under Armour managed its way through the uncertain times. With consumers embracing at-home workouts and outdoor runs, Under Armour continued to provide them with the products they needed. Ranging from the Project Rock collection, UA HOVR Machina, Phantom 2, and Breakthru footwear offerings to the Meridian pant, Infinity sports bra, and award-winning UA Sports Mask, Under Armour made the most of the opportunities that came its way. It also launched the Curry Brand, strengthening the partnership with Stephen Curry to deliver a suite of quality products such as the Curry 8 basketball shoe. Moreover, whilst prioritizing the safety and health of its employees, Under Armour launched the North American e-commerce platform in time to reap the benefits of the boom in e-commerce during Covid-19. As part of a restructuring effort, Under Armour divested MyFitnessPal and discontinued Endomondo platform, the two acquisitions it made back in 2015. The primary reason for divesting and discontinuing it’s two main platforms was that Under Armour wanted to simplify and narrow down the focus of its brand on its target customer. At the same time, Under Armour made it a point to throw all its weight behind the MapMyFitness platform, which includes MapMyRun and MapMyRide, making it the essential element in its digital strategy just as the connected fitness segment was trending.
In addition to this, the company, which was found in a rock and hard place with critics saying that its performance-focused products led to its downfall and that the company should have embraced athleisure, was not paid any heed to. In fact, Under Armour doubled down on targeting its core customer – the focused performer – and stated clearly time and again that it won’t budge from its commitment to make athletes better and empower those who strive for more.
Key Takeaway 3: Innovate & Explore New Avenues Of Growth
By any stretch of the imagination, Under Armour was an established brand by 2010, and it looked like it was only getting started. Thanks to continuous innovation as depicted by the invention of Charged Cotton and new products such as ColdGear Infrared, Speedform Gemini 2, and Athlete Recovery Sleep Wear, among many others, Under Armour kept on setting the bar higher and offer valuable products to its customers. All this while, Under Armour acquired promising companies to form a digital ecosystem, transforming the way people live. Coupled with collaborations with the Bradys and Stephen Curry, Under Armour leveraged the star power to augment its position.
2015 onwards Under Armour began declining as athleisure became the trend. However, rather than give up what the company stood for, Under Armour enhanced its focus on its target audience and strived to provide products that its customers could use to become better performers. Moreover, the company stood firmly in the face of adversities and took the difficult yet much-needed steps of restructuring and change in management to bounce back.
The Under Armour Way Of Doing Business
At the heart of it, Under Armour creates state-of-the-art products designed and developed to utmost protection to elevate the performance of athletes. That’s not all. Under Armour also leverages digital health and fitness apps to connect, gather insights, and drive performance. It wouldn’t be wrong to say that over the years, Under Armour has made the switch from being an apparel and footwear company to a tech company.
All great companies stand up for what matters and make it count. Under Armour is no different. It’s committed to people, practices, and places, striving to make them all better in one way or another. To craft change around the globe, Under Armour has set high standards and implemented effective strategies and strong programs.
Under Armour has closely witnessed the needs and preferences of users evolving. With handheld technology and the desire to embrace a healthy as well as active lifestyle, users navigate the physical and virtual worlds effortlessly. This has led Under Armour to transform itself digitally to offer meaningful value to its target audience.
Gone are the days of being a shirt and shoe company. Under Armour has adopted a digital innovation strategy aimed at connecting athletes’ apparel and devices, collecting data to derive essential insights in order to boost the overall performance. In addition to this, the company has embraced an omnichannel approach to offer a holistic customer experience while creating one of the world’s biggest sporting communities.
By placing the brand at the center of digital customer experience and not just focusing on selling the products but creating a community to connect and empower people, Under Armour changed the game altogether.
Review & Reform
Post-2015, there has been constant restructuring within the company happening to this day. The company is focusing on its core offerings and target audience – the performer – to achieve a competitive advantage and become the go-to choice.
The company has made the difficult decision to let go of long-term contracts such as sponsorships and endorsements to prioritize upper-funnel marketing to build awareness and recover lost ground.
It was evident in the “The Only Way is Through” campaign, which later became “Through This Together” as the Covid-19 pandemic raged the world. Rather than marketing to sell products directly, Under Armour is now focusing on the brand experience it offers.
A Brand For All
For a while, Under Armour seemed to have lost it. Deviating from its roots, the company was at a crossroads. With the athleisure trends becoming mainstream, Under Armour was left behind by solely focusing on performance. Critics were hard at the company, and sales were plummeting along with the stock price. However, Under Armour did some soul-searching and reiterated that its target audience is indeed the athletes looking to enhance performance and people wanting an active lifestyle. This is expected to bode well for the company going forward as nothing is worse than a brand unable to figure out what it does and who it serves.
Finally, Under Armour has also come a long way from portraying a macho and aggressive feel that did not include women to a great extent. Now, the brand has well and truly adjusted its brand image and caters to women around the world.
Under Armour envisions a world in which everyone, everywhere, can reach their peak performance and aims to help people break through the barriers bogging them down. The company understands that it can make a lasting impact through coaching skills, education, mentorship, and service. From supporting Soccer Without Borders – an organization using sport to serve immigrants, refugees, and asylees – to lending a helping hand to the brave men and women committed to protecting all, Under Armour leaves no stone unturned in making a positive impact in the community.
Diversity, Equity, & Inclusion
In a world mired by racial violence, civil unrest, increased division, and xenophobia, Under Armour stands firmly for equality. The company strives to build an equitable workplace and support the communities it is a part of. Having set clear-cut goals for improving the diversity of talent at Under Armour, making the workplaces safe and inclusive for all, and supporting black communities. Continuous efforts by the company earned it recognition by helping it bag the Diversity Best Practices Award and CEI Best Place to Work Award in 2020.
Best performance on the cleanest Earth possible – that’s what Under Armour wants to achieve. Going the extra mile to embrace ethical, efficient, and sustainable ways to safeguard the planet, Under Armour is continuing to set the bar higher. In addition to making a better world, Under Armour focuses on creating a better world for all. From responsible sourcing and collaborating with multiple partners throughout the supply chain to investing in cleaner and greener operations that produce less waste and lower the carbon footprint, Under Armour embraces sustainable ways of doing business. The company understands that sustainability begins at home and leads the way to sustain the environment for future generations to come.
Key Takeaway 4: It’s Never Too Late
Sure, things haven’t worked out as Under Armour hoped that they would. However, Under Armour is currently transforming and building back better. With increasing focus on its core customer, leveraging digital channels to derive the growth, and solving the audience gap to cater to women, Under Armour is going in the right direction.
The company has made the bold move to cut back on conventional marketing strategies and embrace top-of-the-funnel marketing and personalized marketing to enhance brand awareness and become the brand of choice. All this while, the company remains committed to sustainability, philanthropy, and diversity, equity, and inclusion to make the world a better place.
Under Armour Today & Key Strategic Takeaways
Under Armour has come a long way. From an idea in the late 1990’s to a brand that’s recognized and demanded around the globe today, Under Armour ushered a new era in the athlete apparel, footwear, and accessories industry. Making innovative products to enhance performance is the core DNA of Under Armour, and the company has stayed committed to its goal through thick and thin. The company is going through a transformation currently and well and truly on its way to bouncing back better than ever before.
Key Strategic Takeaways
Cater To The Pain Points Of Your Customers
Is your product or service solving the problems faced by your customers and providing additional value? If yes, then you are in business. If not, then it's better to come with another solution. Under Armour understood this from the very beginning. The first product of the company was a short-sleeved t-shirt made to be worn in warm weather. It helped athletes stay light and dry, enhancing their performance. No wonder the company's initial customers came back with glowing reviews and even asked: Do you make shirts in long sleeves? Do you make clothing for cold weather? Do you have apparel for sports other than football? Do you make apparel for women? At that point, Under Armour did none of these things, but the brand went back to the drawing board and catered to its customers' needs and preferences, giving them exactly what they wanted.
Standout By Resonating With Your Target Audience
Connecting with the customers on a deeper level has always been the specialty of Under Armour. After all, how else could the company carve out a pie for itself in the Nike and Adidas dominated athletic apparel and footwear industry? From offering quality products such as HeatGear and ColdGear that struck a chord with its customers, starting a chain of word-of-mouth marketing that propelled the brand to launching unique advertisements, ranging from the ESPN ad in 2000, the "Protect this House" ad in 2003, and the "Click-Clack" ad in 2006, among others, Under Armour always strived to always connect with its customers, and its efforts paid off. That's not all. The company also made strategic collaborations with the right celebrities such as Tom Brady and Stephen Curry, among others, building its brand following. No wonder, Under Armour kept growing exponentially, and its customers became its biggest advocates.
Innovate & Experiment Come What May
"The Times They Are a-Changin." Under Armour understands this better than most companies out there. This is why it continues to launch new innovative products, delved into new markets of footwear and accessories after it started off with apparel, and expanded internationally. That's not all. Under Armour also embraced a digital strategy in 2013, realizing the importance of creating a community, harnessing the power of technology and data to improve lifestyles. Under Armour even makes new collaborations as a way to further its brand appeal and visibility and never backs down from taking bold steps. Has it all worked every time? No, absolutely not. But it has made sure that Under Armour continues to progress and reinvent itself to cater to the ever-evolving customer preferences and market dynamics while gaining a competitive advantage.
Persevere Through The Difficult Times
Setting up and running a business is not easy. Kevin Plank learned this the hard way. He invested his savings, racked by credit card debt, worked from his grandmother's basement, sold the apparel from the trunk of his car. That's not all. He had industry giants breathing over his neck trying to run him out of business, the company's million-dollar acquisitions of MyFitnessPal and Endomondo didn't work out as planned, the share price tanked post-2015, the company missed out on the athleisure trend, there was negative publicity with the company almost written-off, Kevin had to step aside and let Patrick Frisk take over as CEO, there was painful, but necessary structural changes with layoffs, and the Covid-19 struck a blow to the company as well. The challenges were never-ending throughout the company's 25 years in business. However, at no point did the company give up. It learned from its mistakes, stuck to its guns, and rather than adopt a new strategy altogether, it increased its focus on its core customer and goal of enhancing the performance of athletes. The company continues to transform itself by taking the difficult yet necessary steps to bounce back, and that is a testament to it's never-give-up attitude.