BusinessAug 9, 2024
Under Armour Was Supposed to Be “The Next Nike.” Instead, It’s Struggling For Relevance, With Sales Declining and Losses Mounting.
Retail Pivot
Noah Weidner
Discover
Despite its name, Under Armour is severely lacking in the defense department — and years of bad decisions have them taking L after L following a more than 900% run from 2008 to 2015. The brand once seen as “the next Nike,” is now down over 85% from its record highs. And things might get worse before they get better.
No Armour: The faltering sportswear giant reported a 10% revenue decline and a $300M loss in the latest quarter. GlobalData’s Neil Saunders says Under Armour is “struggling for relevance” in the crowded athleticwear market. After two CEO changes since 2019, founder Kevin Plank has returned to lead the brand in March. Following a disaster quarter, the company is restructuring and announced layoffs on Thursday — proving that this comeback won’t be cheap, easy, or convenient.
Under Armour hopes that embracing a more premium brand will help it navigate the retail environment, cutting back on promotions and discounts to improve margins. However, similar strategies employed by industry peers have had mixed results, highlighting that growth in this once-robust industry is no longer a given.
Put me in, coach: Not all sports brands are flailing. Despite dropping Kanye West’s YEEZY line, Adidas has more than doubled since its Oct. 2022 lows by embracing fast-changing fashion trends and keeping inventory fresh. Bloomberg’s Andrea Felsted and Leticia Miranda say that Adidas’s comeback story offers some lessons for Nike (and other sporting brands).
