Kevin Plank was just another Football player when he started selling shirts. Tired of the baggy cotton shirts trending in the 1990s, Plank launched his own company selling sportswear in 1996. He used his own savings of $15,000 cash and $40,000 from his credit accounts for initial funding. Under Armour would go on to become one of the best sporting brands worldwide.
Now a multi-billion-dollar company with operations worldwide, the sports giant started its functioning in Kevin Plank’s grandmother’s basement. Plank brought innovation to new sportswear design, making t-shirts that were sweat-friendly and skintight, using fabrics found in women undergarments. These were much more athlete-friendly than the cotton ones before, and soon were a hit among his football-playing connections.
Making $17,000 in their first year, Under Armour would go on to exceed sales of $200 million in 2004. The brand was getting so successful that many considered it an underdog to the likes of Nike. Some of the most famous athletes are linked with Under Armour, with the likes of Tom Brady and Stephen Curry leading the pack. Kevin Plank stepped down as CEO of the company at the backend of 2019 to take a step back from the day-to-day operations of the company. This would allow him to focus more on Under Armour’s brand image and product innovation.
Hence, he would take on a new role as Executive Chairman and Brand Chief of Under Armour, relinquishing his duties to his previous President and COO, Patrik Frisk. But why the sudden change? Why is it that Plank transferred his duties over to someone who just joined in 2017? There are a few reasons for this, some of which are mentioned below.
In 2012 Kevin Plank said this about Under Armour: “We are the athletic brand of this generation and the next”. This was a bold claim considering the established and innovative brands like Nike and Adidas in the market. His predictions seemed to be coming true as the company signed sponsorship deals with major sports teams and sportspeople worldwide. The likes of Michael Phelps, a record-holding Olympian and Tom Brady, one of the legends of the NFL, were now Under Armour sponsored. The company was soaring, with revenue growth rates above 20% over the next few years.
However, this growth rate slowed down drastically in 2017, with single-digit growth ever since. This went so far that the company reported a loss in April 2017, with its CFO resigning in January. With various efforts of expansion and restructuring since then, Plank was mainly unsuccessful in bringing about the same levels of success as before. Perhaps his time to give way to a more dynamic leader with fresh ideas was nearer than we thought?
Trouble with Stakeholders
Amid the troubling financial times, Kevin Plank and his team repeatedly assured their shareholders that better times were ahead, and the company had just hit a temporary slump. In 2017, three shareholders filed a lawsuit against Plank and his team for misleading them with respect to the financial position of the company. Furthermore, there were numerous accusations heralded against the company in an article by The WallStreet Journal. It accused Under Armour of sexism and unprofessionalism, with several former female employees expressing their concerns. This further tarnished their reputation among various stakeholders, most importantly the customers. Plank acknowledged they could do better to promote a more inclusive culture. The company was in disarray, and Plank was at the center of it all.
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Stepping down the best move?
With the company reporting losses and not growing as significantly for a few years now, this step seemed inevitable. While Plank would still be calling the shots, he would be away from the spotlight and could focus on regaining Under Armour’s brand image.
However, controversy would soon follow as Under Armour would go into an investigation by the SEC for evasive accounting practices in January 2020. With one crisis after another for Under Armour, can Kevin Plank save his business amidst a global pandemic?