Consumers’ changing tastes are also a problem for Under Armour. Retail market analysts have noticed a shift away from the so-called performance segment of the retail market that Under Armour pioneered. Market research firm NPD Group also found that U.S. sales of basketball products, for example, declined by a whopping 23.6 percent between 2016 and 2017, after dropping 18 percent the previous year.
Under Armour experienced that slowdown when it had to slash prices for the third edition of its Stephen Curry-branded shoe, the Curry 3, to stay competitive with Nike’s LeBron James-branded shoe.
“Clearly the price cut was a big deal,” Kernan said. “Going from $130 to less than $100 on the Curry 3 was a big eye-opener for us.”
The growth in the market is occurring in retro and casual clothing and shoe lines, bringing fresh attention to brands such as Puma and Skechers. Nike has responded by bringing back some of its earlier offerings.
The resurgence of retro styles puts Under Armour in a difficult position.
“Under Armour is a newer brand, and they don’t have enough history to compete in this very ’90s-driven market we’re in right now,” said Erinn Murphy, managing director at Piper Jaffray investment bank.
Perhaps as a result of the setbacks, Under Armour seems focused on carving a new path.
The company recently brought on Patrik Frisk, former chief executive of Canadian footwear giant Aldo Group, as the company’s new president and chief operating officer. He is tasked with “aligning the entire company around digital,” Plank said last week, an obvious reference to helping the company build out its online sales. The company also seeks to transition into the market for so-called casual sportswear and footwear, where Aldo is a major player.
It’s too early to tell whether Under Armour’s pivot will work, but the company’s executives seem determined.
“It’s been a fight since Day 1. It was a fight to get to $1 million and to $1 billion and $5 billion,” Plank told investors in a rallying cry that seemed eerily reminiscent of Under Armour’s early TV spots. “Make no mistake: We are squarely in it. We are in this fight.”
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