Under Armour

Under Armour, Inc.
Public
Traded as NYSE: UA
S&P 500 Component
Founded 1996 (1996)
Founder Kevin Plank
Headquarters Baltimore, Maryland, U.S.
Area served
 Worldwide
Key people
 Kevin Plank
(Founder, CEO & Chairman)
Products
Revenue Increase US$3,960,000,000 (FY 2015)
Increase US$408,547,000 (FY 2015)
Increase US$232,573,000 (FY 2015)
Total assets Increase US$2,869,000,000 (FY 2015)
Total equity Increase US$1,668,000,000 (FY 2015)
Number of employees
 11,000 (Oct 2015)
Website www.UnderArmour.com
Footnotes / references
Key people, Founder;[1] Financials, Number of Employees[2]
Kevin Plank, founder of Under Armour

Under Armour, Inc. is an American sports clothing and accessories company. The company is a supplier of sportswear and casual apparel.[3] Under Armour began offering footwear in 2006.[4] Under Armour's global headquarters is located in Baltimore, Maryland with additional North American corporate office locations in Austin and Houston, Texas; Denver, Colorado; New York, New York; San Francisco, California; Portland, Oregon; Nashville, Tennessee; and Toronto, Ontario. Under Armour's International Headquarters is located in Panama City, Panama, with Latin America offices in São Paulo, Brazil; Santiago, Chile; and Mexico City, Mexico. Its European headquarters is in Amsterdam's Olympic Stadium with an additional office in Munich, Germany.[5] The Under Armour Shanghai office is the regional headquarters for Greater China. Additional Asia Pacific offices are in Guangzhou, China; Hong Kong; Jakarta, Indonesia; Tokyo, Japan; and Sydney, Australia.[6]

History

Early history

Under Armour was founded in 1996 by Kevin Plank, a then 23-year-old former special teams captain of the University of Maryland football team. Plank initially began the business from his grandmother's basement in Washington, D.C.[7] He spent his time traveling up and down the East Coast with nothing but apparel in the trunk of his car. His first team sale came at the end of 1996 with a $17,000 sale. From his grandmother's basement, Plank moved to Baltimore. After a few moves in the city he landed at his current headquarters in Tide Point.[8]

As a fullback at the University of Maryland, Plank got tired of having to change out of the sweat-soaked T-shirts worn under his jersey; however, he noticed that his compression shorts worn during practice stayed dry. This inspired him to make a T-shirt using moisture-wicking synthetic fabric.[9] After graduating from the University of Maryland, Plank developed his first prototype of the shirt, which he gave to his Maryland teammates and friends who had gone on to play in the NFL. Plank soon perfected the design creating a new T-shirt built from microfibers that wicked moisture and kept athletes cool, dry, and light.[7] Major competing brands including Nike, Adidas and Reebok would soon follow in Plank's footsteps with their own moisture-wicking apparel.[10] Plank opted to use the British spelling "armour" in the company name because the toll-free vanity number was still available for that version.[11]

People began to take notice of the brand when a front page photo of USA Today featured Oakland Raiders quarterback Jeff George wearing an Under Armour mock turtleneck. Following that front page, Under Armour's first major sale came, when an equipment manager from Georgia Tech requested 10 shirts from Plank. This deal opened the door to a contract with Arizona State University, North Carolina State and other Division I football teams. With positive reviews from players, word began to spread and orders began to increase.[9] That same year, Under Armour launched with several new apparel lines including ColdGear, TurfGear, AllseasonGear, and StreetGear.[9] By the end of 1996, Under Armour had sold 500 Under Armour HeatGear shirts, generating $17,000 for the company.[9] In 1997, Plank had $100,000 in orders to fill and found a factory in Ohio to make the shirts.

Growth

Under Armour received its first big break in 1999 when Warner Brothers contacted Under Armour to outfit two of its feature films, Oliver Stone's Any Given Sunday and The Replacements.[7] In Any Given Sunday, Willie Beamen (played by Jamie Foxx) wears an Under Armour jockstrap. Leveraging the release of Any Given Sunday, Plank purchased an ad in ESPN The Magazine. The ad generated close to $750,000 in sales, and nine years after starting the company, Plank finally put himself on the payroll.

Part of the Under Armour Headquarters located in Locust Point, Maryland

The following year, Under Armour became the outfitter of the new XFL football league, gaining even more attention during the league's debut on national television.[9] In 2003, consumer sector focused private equity firm Rosewood Capital invested $12 million into the company.[12] The same year, the company launched its first television commercial, which centered on their motto, "Protect this house."[7] The company IPOd on the NASDAQ in November 2005, raising $153m of capital.[13] In late 2007, Under Armour opened its first full-line full-price retail location at the Westfield Annapolis mall in Annapolis, Maryland.[14]

It has also opened several specialty stores and factory outlet locations in Canada, China, and 39 states including the opening of its first Brand House in Baltimore in 2013 and second Brand House in Tyson's Corner, Virginia.[15]

In 2009, baseball Hall of Famer Cal Ripken Jr. formed an alliance under which the company would have significant presence at several venues and events under the auspices of Ripken Baseball, including providing uniforms for the minor league Aberdeen IronBirds and youth teams participating in the Cal Ripken World Series.[16]

The company is reported to be the major commercial sponsor for the reality TV show Duck Dynasty and has garnered attention for taking a stand supporting show "patriarch" Phil Robertson.[17]

Under Armour provided the suits worn by speedskaters in the 2014 Winter Olympics. The US speedskaters were losing while wearing the new Mach 39 speedsuits, but when they reverted to the previous model suits, the skaters continued to lose. Although there did not appear to be a design flaw in the suit that caused the poor results, the news of the suits caused Under Armour stock to drop 2.38%.[18]

The company, offering a reported US$250,000,000 over 10 years, also bid hard over Nike to sign NBA MVP Kevin Durant to an endorsement deal. However, Nike ultimately re-signed Durant after agreeing to structure a contract, offering US$300,000,000.[19]

On January 21, 2014, it was announced that the University of Notre Dame and Under Armour had come to terms on providing uniforms and athletic equipment for the university. This 10-year deal was the largest of its kind in the history of college athletics and became effective July 1, 2014. As of 2014, Under Armour has operated revenue and operating profit more than 30%, accelerating from their 2013 pace. Its share price has soared 62.5% this year.[19]

After its November 2013 acquisition of digital app maker MapMyFitness for US$150,000,000, in February 2015 Under Armour announced it had purchased the calorie and nutrition counting app maker MyFitnessPal for $475m, as well as the fitness app maker Endomondo for US$85,000,000.[20][21]

On January 6, 2016, Under Armour announced a strategic partnership with IBM to use IBM Watson's cognitive computing technology to provide meaningful data from its IOT kit and UA Record app.[22]

On March 3, 2016, the company became the Official Match Ball Partner of the North American Soccer League, starting with their 2016 season.[23][24]

May 26, 2016 Under Armour and UCLA announced their plans for a 15-year, $280 million contract, making this the largest show and apparel sponsorship in NCAA history.[25]

In July 2016 Under Armour leased the 53,000 square feet space formerly occupied by FAO Schwarz on New York's Fifth Avenue; it projected that its store would open in 2018.[26][27] FAO Schwartz had been paying $20 million in rent.[27]

Products

Under Armour Shoes

Early products

An Under Armour Cap

The expansion of Under Armour's product lines, such as TurfGear, AllseasonGear, and StreetGear put Under Armour at the forefront of the emerging performance apparel industry.[7] In 2003, Under Armour launched their Women's Performance Gear product line.[7]

Recent releases

Under Armour announced an addition to their ColdGear product line, called Infrared, that was released in 2013.[28] This line claims to disseminate heat using ceramic powder and re-circulate heat around the wearer's body. This was purportedly designed so that the wearer's heat signature will not be picked up. Under Armour also had released a product with scent control technology in 2012 titled, "Under Armour Scent Control". This line claims to be designed so that the wearer's scent cannot be detected.[29]

Under Armour outlet store in Henry County, Georgia

Under Armour is inventing a new type of shirt called "Coldblack," which is designed to reflect heat and keep athletes cool in the sun.[30] Under Armour has come out with new styles for football uniforms. In October 2012, Under Armour created "The Wounded Warrior" project for football uniforms.[31] The University of Hawaii and Boston College wore the star studded cleats and the American striped jerseys. They were revealed when Boston College played Maryland on October 27, 2012, also when Hawaii played UNLV on November 24, 2012.[31]

The company produces the Speedform shoe in a Chinese bra factory. It has no insole and little stitching. Shoes are Under Armour's fastest growing product line, growing 31% from 2011 to $239 million in sales in 2012.[32]

Recalls

On April 29, 2009, the United States Consumer Products Safety Commission announced a voluntary recall of all Under Armour brand athletic cups. The cups might break when hit, posing a risk of serious injury. They were sold from January 2006 through March 2009.[33]

On November 3, 2011, the United States Consumer Products Safety Commission announced a voluntary recall of all Under Armour Defender chin straps. The straps pose a laceration hazard when a player contacts the metal snap. They were sold from January 2008 through September 2011.[34]

Sales

In 2014, sales of apparel, footwear and accessories represented 74.3%, 14% and 9.9% of net revenues, respectively. Revenue has grown by steadily by 30% from 2010-2014.[35] As of January 28, 2016 the fourth quarter net revenues for 2015 increased 31% to $1.17 Billion while the full year net revenues increased 28% to $3.96 Billion. Based on these numbers, Under Armour has updated its 2016 net revenues outlook to approximately $4.95 Billion (+25%). [36]

Demography

Of Under Armour's current consumer base, 53% of Under Armour's customers are male and 47% of customers are female. Over 36% of customers have graduated from college, the majority of Under Armour's customers fall within the age range of 25-34, with the smallest customer base consisting of those aged 65+. 49.9% of Under Armour's customers have a household income ranging from $75,000 to $149,000 (Gfk Mediamark Research & Intelligence, 2015).[37]

Attribute Consumers w/attribute (%) Attribute Consumers w/attribute (%)
Men 53 Adults 18-49 75.4
Women 47 Adults 25-54 67.6
Educ: graduated College plus 36.5 HHI: $150,000+ 17.1
Educ: attended College 26.3 HHI: $75,000-$149,999 49.9
Educ: graduated HS 22.4 HHI: $60,000-$74,999 8.2
Educ: did not graduate HS 4.8 HHI: $50,000-$59,999 7.1
Educ: post graduate 11.1 HHI: $40,000-$49,999 1.9
Educ: no college 27.1 HHI: $30,000-$39,999 3.7
Age: 18-24 17.1 HHI: $20,000-$29,999 3.2
Age:25-34 30.6 HHI: <$20,000 8.9
Age:35-44 17 Census Region: North East 16.9
Age: 45-54 20.8 Census Region: South 50.4
Age: 55-64 11.2 Census Region: Midwest 19.5
Age: 65+ 4.1 Census Region: West 13.2
Adults 18-34 47.7

Community involvement

UA Give Back is Under Armour's effort to become involved in different facets of the world community. They have different branches in their organization that specialize in each cause that Under Armour supports. They consist of the UA Power in Pink, UA Freedom and UA Win Global.[38]

UA Power in Pink is an Under Armour program that promotes women using exercise and fitness to fight breast cancer.[39] UA Freedom is an Under Armour program that supports the efforts of the Wounded Warrior Project whose mission is to honor, raise awareness, and aid wounded veterans and military service members.[40] UA Win Global is a children's athletics program which focuses on "underserved communities" by enhancing play areas, investing in sports programs and providing support for sports coaches.[41]

As of 2012, Under Armour was the sponsor of the Baseball Factory's "Premium Video Program", which holds more than 100 events for youth athletes across the United States annually.[42]

Marketing

Under Armour promotes its products by sponsorship agreements with many celebrity athletes, professional teams and college athletic teams, a field in which it competes with other sports apparel companies.[43][44]

Under Armour also markets its products through product placements:

Controversies

The controversial Under Armour Performance Fitness Center at the Bank of America Building in Baltimore.

UA Fitness Performance Center and Mural Covering

In 2015, Under Armour released plans for their new Under Armour Fitness Performance Center at the Bank of America Building at 10 Light Street in Baltimore. The Fitness Performance Center is planned to take place in the building's lobby, covering historic murals of Baltimore's history by art deco artist Hildreth Meiere with artificial turf flooring. This plan has been seen as controversial due to the fact that Kevin Plank and developer Cary Euwer used state and federal tax credits to restore the historical building, yet the historical murals are being covered up by turf flooring.[48] Many historians and local Baltimoreans have expressed public outcry that the design should be reconsidered and the murals should be saved.

Hunting video

In January 2016 Under Armour initiated a marketing campaign featuring women hunters including an American woman named Sarah Bowmar.[49][50] In August 2016 a video filmed by Bowmar went viral that showed her husband spearing a bear and then rejoicing that he had hit it; the bear was found dead only the next day.[49][51] Under Armour was heavily criticized worldwide and as result, Under Armour ended its contract with Bowmar a few days after the video became known.[49] Hunters reacted negatively with a campaign of their own, boycotting Under Armour.[52]

References

  1. ↑ Mirabella, Lorraine (April 30, 2015). "Under Armour remains committed to Baltimore amid unrest, Plank says". Baltim. Sun. Retrieved May 1, 2015.
  2. ↑ "UA-2013.12.31-10K". EDGAR. US SEC. February 21, 2014.
  3. ↑ Terry, Robert J. (September 26, 2005). "Analysts: Brand crossover risky for Under Armour". Balt. Bus. J. Retrieved May 1, 2015.
  4. ↑ "Form 10-K for the fiscal year ended December 31, 2008". EDGAR. US SEC. February 20, 2009. p. 2. Retrieved May 1, 2015.
  5. ↑ "Under Armour Announces Multi-Year Partnership with FC St. Pauli and Opening of New Munich Office (NYSE:UA)". investor.underarmour.com. Retrieved 2016-01-19.
  6. ↑ "Under Armour Fact Sheet" (PDF). Under Armour. January 18, 2015 – via shareholder.com (NASDAQ OMX Group).
  7. 1 2 3 4 5 6 7 8 "Our History". Under Armour. Retrieved June 17, 2015.
  8. ↑ "Our History". Under Armour. Retrieved October 16, 2012.
  9. 1 2 3 4 5 "Under Armour Performance Apparel History". International Directory of Company Histories (reprint). 61. St. James Press. 2004. Retrieved November 28, 2012 – via Funding Universe.
  10. ↑ Salter, Chuck (August 2005). "Protect This House". Fast Co. Retrieved May 2, 2015 – via FastCompany.com. Plank may have caught the megabrands snoozing, but now they're wide awake, and his company is under siege from Nike Dri-Fit, Adidas ClimaLite, Reebok Hydromove, and others
  11. ↑ Kevin Plank; Everette Fortner (host); Brendan Boler (introducer) (October 3, 2008). Kevin Plank, Chairman & CEO, Under Armour (HTML5 video). Darden Leadership Speaker Series. University of Virginia Darden School of Business. Approximate time when fact is related: 8 min 55 sec. Retrieved May 2, 2015 – via YouTube.
  12. ↑ "Under Armour CEO to cash in". Retrieved 2016-08-11.
  13. ↑ Gelsi, Steve. "Under Armour's IPO doubles". Retrieved 2016-08-11.
  14. ↑ Walker, Andrea (24 May 2007). "Under Armour to open retail site in Annapolis". Baltimore Sun.
  15. ↑ Korman, Chris (15 February 2013). "Under Armour sets new course with Brand House". Baltimore Sun. Retrieved March 31, 2015.
  16. ↑ "Under Armour Inks Deal With Cal Ripken Baseball". NYSportsJournalism.com. April 22, 2009. Retrieved May 2, 2015.
  17. ↑ Swift, Tim (December 20, 2013). "Under Armour to stick with 'Duck Dynasty' franchise amid media uproar". Baltimore Sun. Retrieved May 2, 2015.
  18. ↑ Robinson, Joshua (February 18, 2014). "How a Bet on High-Tech Suits Left U.S. Skaters in the Cold". Wall Street Journal. pp. A1, A10.
  19. 1 2 Santoli, Michael (December 19, 2014). "Yahoo Finance 2014 Company of the Year: Under Armour". Yahoo Finance. Retrieved May 2, 2015.
  20. ↑ Perez, Sarah (February 4, 2015). "Under Armour Snatches Up Health And Fitness Trackers Endomondo And MyFitnessPal". TechCrunch.
  21. ↑ Ray (February 4, 2015). "Under Armour (owner of MapMyFitness) buys both MyFitnessPal and Endomondo" (blog). DC Rainmaker.
  22. ↑ "IBM Watson, Under Armour to Transform Health and Fitness". www-03.ibm.com. 2016-01-06. Retrieved 2016-07-12.
  23. ↑ "NASL, Under Armour Announce Groundbreaking Match Ball Partnership". NASL. March 3, 2016. Retrieved March 3, 2016.
  24. ↑ "Q&A With Under Armour Senoir Director Of Global Football Antonio Zea". NASL. March 2, 2016. Retrieved March 3, 2016.
  25. ↑ Wharton, David. "UCLA's Under Armour deal for $280 million is the biggest in NCAA history". Los Angeles Times. Los Angeles Times.
  26. ↑ Patrick Coffee. "In Big Retail Push, Under Armour Will Move Into NYC's Iconic FAO Schwarz Location". Adweek. Retrieved 28 July 2016.
  27. 1 2 "Under Armour Leases Former FAO Schwarz Flagship, Plans to Roll Out Brand In 600 Kohl's Stores - CoStar Group". www.costar.com. Retrieved 2016-08-28.
  28. ↑ Burke, Monte. "Under Armour Unveils Its New Products For 2013, With A Little Help Form Arian Foster and Gina Carano" (blog). Forbes.com. New York City.
  29. ↑ Staff (June 14, 2012). "Under Armour Launches New Scent Control Hunting Collection". AmmoLand. New Jersey, United States. Retrieved May 2, 2015.
  30. ↑ Mirabella, Lorraine (May 1, 2012). "Under Armour poised for greater growth with new products". Baltim. Sun. Retrieved May 2, 2015.
  31. 1 2 Gandu, Gurvinder Singh (October 8, 2012). "Under Armour Unveils New Wounded Warrior Project Uniforms for Boston College and Hawaii". Complex.com. New York City: Complex Media. Retrieved May 2, 2015.
  32. ↑ Wagner, Kurt (July 1, 2013). "Under Armour's Crew". Fortune. 168 (1): 17. Note: an online version of this article, entitled "Under Armour's crew of star athletes" appears here.(subscription required)
  33. ↑ "Under Armour Recalls Athletic Cups Due To Injury Hazard" (Press release). U.S. Consumer Product Safety Commission. April 29, 2009. Retrieved May 2, 2015.
  34. ↑ "Under Armour Recalls Chin Straps for Football Helmets Due to Laceration Hazard" (Press release). U.S. Consumer Product Safety Commission. November 3, 2011. Retrieved May 2, 2015.
  35. ↑ "Mergent - Creating Global Financial Solutions". www.mergent.com. Retrieved 2016-02-10.
  36. ↑ "Under Armour - Fourth Quarter Net Revenues Growth". Retrieved 2016-02-16.
  37. ↑ "MRI+: Welcome". mriplus.com. Retrieved 2016-02-10.
  38. ↑ "Under Armour Corporate Giving Programs". Under Armour. Retrieved May 2, 2015.
  39. ↑ "Power In Pink® & UA — Support The Fight Against Breast Cancer". Under Armour. Retrieved May 2, 2015.
  40. ↑ "Wounded Warrior Project & Under Armour Freedom". Under Armour. Retrieved May 2, 2015.
  41. ↑ "UA Win — Empowering the Next Generation of Athletes". Under Armour. Retrieved May 2, 2015.
  42. ↑ Latzes, Samantha (October 9, 2012). "Baseball Factory and Under Armour Give Back to Baltimore" (Press release). Baseball Factory. Retrieved May 2, 2015.
  43. ↑ Marc Tracy for the New York Times. May 24, 2016 [http://www.nytimes.com/2016/05/25/sports/ucla-under-armour-sponsorship.html?_r=0 U.C.L.A. and Under Armour in Record Sponsorship Deal
  44. ↑ Staff. "Athletes with Under Armour endorsements (Pictures)". Baltim. Sun. Retrieved May 2, 2015.
  45. ↑ The Challenge: Battle of the Seasons Under Armour Promo a.k.a. Challenges Promo. YouTube. September 8, 2012. Retrieved May 2, 2015.
  46. ↑ "The Incredible, Tactical Undergarments Designed for the Avengers Cast". Gizmodo. April 14, 2015. Retrieved 2015-12-09.
  47. ↑ http://uk.businessinsider.com/house-of-cards-season-3-brands-2015-3?r=US&IR=T
  48. ↑ https://www.baltimorebrew.com/2015/11/11/rare-artwork-underfoot-could-soon-be-out-of-sight/
  49. 1 2 3 Lara O'Reilly for Business Insider. Aug. 19, 2016 Under Armour cancels Trophy hunting contract with Sarah Bowmar
  50. ↑ Under Armour. Press Release: Under Armour Introduces 2016 Women Of Will Hunt Campaign. January 20, 2016)
  51. ↑ Ed Mazza for Huffington Post. Aug 16, 2016 Josh Bowmar Films Himself Spearing A Bear, Then Giggling Over The Kill
  52. ↑ Sun, Baltimore. "Under Armour taking heat from both sides in uproar over spear hunting". Retrieved 2016-09-07.

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