By Lorraine Mirabella and Nayana Davis, The Baltimore Sun
10:02 PM EST, February 21, 2014
Under Armour acted swiftly to move beyond the controversy over whether the brand's high-tech skinsuits were responsible for U.S. speedskaters' lackluster run at the Sochi Olympics.
The Baltimore sports apparel maker renewed its sponsorship of US Speedskating through two more Winter Olympics in a deal announced Friday.
"We want to make a big statement of coming back and saying we're going to put an eight-year commitment for two more Olympics to have athletes wearing and competing in Under Armour and hopefully winning lots and lots of medals," Under Armour founder and CEO Kevin Plank told CNN on Friday.
The sleek black suits, marketed as the fastest ever, became the prime suspect last week for the team's disappointing performance. Skaters decided midway through the competition to swap the suits for an earlier Under Armour version worn during World Cup season, but still did not earn any medals until Friday.
The short-track speedskating team won silver Friday in the men's 5,000 relay, giving the U.S. team its first and only medal in Sochi. Four years ago, in Vancouver, American speedskaters scooped up 10 medals, and they were the favorites in several events at Sochi.
Under Armour moved quickly to minimize the damage to its reputation for producing high-performance apparel for athletes of all levels, an image critical to its sales growth domestically and abroad.
The speedskating suits, designed in collaboration with defense contractor Lockheed Martin, will be back in future competitions, including the 2018 games in Seoul, South Korea, said Matt Mirchin, Under Armour's executive vice president of global marketing.
"If we didn't believe in the Mach 39, we would never have allowed it to be used in an Olympic setting," Mirchin said. "The Mach 39 will live. We know that it's the best suit out there to wear."
Friday's contract extension was seen as ending the flap, as investors bid up Under Armour shares more than 5 percent.
"It says the product is not the problem," said Bob Leffler, president of Baltimore-based Leffler Agency, a marketing group. "If you want to talk about putting out a fire, it cancels that out."
Analysts praised Under Armour's response from the beginning, when Plank and other Under Armour executives addressed the issue through a range of media outlets. Plank called the team's performance "a bit of a head-scratcher."
"This is going to be a small blemish and nothing more," said Bob Dorfman, executive creative director of Baker Street Advertising in San Francisco. "Yes, there is a little bit of blow-back they're suffering. They're a high-performance company, and these are high-performance athletes who were expected to win gold and didn't. There has been some controversy and blame on the suits."
The uniform imbroglio caught Under Armour by surprise, Mirchin said.
The issue bubbled up during the first week of the Olympics as team members performed well below expectations. Heather Richardson, the top-ranked women's skater in the world, finished seventh in the 1,000 meters and asked the Under Armour team to cover up the vent on the back.
"Is it the suit? Is it our preparation? The suit's the easiest thing to fix," said Brian Hansen after skating in the 500- and 1,000-meter races.
Even as US Speedskating moved to allow its athletes to race in older skinsuits — in the name of boosting their confidence — the organization and its coaches defended the new suits. Even the U.S. Olympic Committee issued a statement that appeared to clear the suit but did not point to any one factor. Some raised questions about the impact of the team's training at altitude for a sea-level competition.
Through it all, Under Armour stood behind the suits but worked to accommodate the athletes.
"This situation presented a tremendous opportunity for Under Armour's leadership team to react to a major crisis on a global stage, and they handled it like consummate professionals," said Jason Moser, a senior analyst with Motley Fool One in Alexandria, Va.
For any public relations challenge, a company's response is critical, Moser said.
"They can be defensive, or they can take a proactive stance, and Kevin Plank and his team have done a very good job of taking the proactive stance," Moser said. "It's one thing to say, 'We believe in the suit.' … But then he said, 'We remain patriots first and want to put the athletes in the best position to win.' "
It helps that speedskating is a niche sport that many consumers only think about once every four years rather than an Under Armour staple like football.
"I don't think the success or failure of the speedskating team is going to make much difference," Dorfman said. "If the clothing is stylish and does what it's supposed to do, that is a bigger issue."
One expert, however, called Under Armour's willingness to accommodate a mistake.
"If they believe in this material, they ought to say, 'We love our Olympic champions, but it's them and not the suits,'" said Steve Blue, who helped engineer the turnaround of rail industry manufacturing company Miller Ingenuity and coaches CEOs on branding and business growth. "When you say it's not [the athletes'] fault, who's the consumer going to blame then? They'll blame the material and the manufacturer."
A bigger risk, Blue added, has been "staking the whole brand on the performance of some athlete who may or may not get a gold medal based on a millisecond. That's a huge gamble."
Under Armour showed Friday it's willing to continue to take that gamble.
"We wanted to send a message to the world that Under Armour and US Speedskating, when we get knocked down, we get back up and want to come back and be bigger, stronger, faster and better in 2018," Mirchin said. "When athletes are awarded medals, it will be Americans receiving them."
The sponsorship deal, set to expire this year, will now continue until Dec. 31, 2022. Mirchin said the company would not disclose its financial contribution to the team.
"US Speedskating remains extremely grateful to have such a supportive partner and to have access to Under Armour's game-changing innovations, which have helped propel countless athletes around the world to championship results," US Speedskating President Mike Plant said in a statement Friday.
Dorfman said he believes the skaters need Under Armour and its sponsorship money more than Under Armour needs the skaters.
As the story plays out, he said, "there will be other reasons and postmortems as to why the speedskaters haven't medaled. The sea level versus altitude training, the quality of the ice. All those things will take precedence over the fact that it could be the uniforms."
Regardless of what really caused the skaters' poor performance, Under Armour needed to get ahead of the problem to protect the brand.
Consumer trust, Plank told CNN on Friday, is "built with drops and it's lost in buckets, so I don't know if we lost a bucket, and I don't know how much we're starting with. … There were a lot of shots being taken at the brand, and this wasn't the athletes, it was the noise around. … At the end of the day, we've got a great brand and we make a great product."
Tribune Newspapers reporter Jared Hopkins contributed to this article.
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